On June 30, 2010 (8 weeks and 6 days from now), the @twitterapi team will be shutting off basic authentication on the Twitter API — you can see the announcement here (and, this has been previously announced). All applications, by this date, need to switch to using OAuth. Don't fret! @twitterapi is here to help! Feel free to reach out to us directly, or via our Twitter Development Talk group.
The switch to OAuth is a good thing! You, as the application developer,
don't have to worry about exposing the credentials for your users whether through a bug or other means (especially considering that a lot of people use the same password for multiple services);
don't have to worry about the user changing their password — a user can change his or her password and the OAuth "connection" to your app will still work;
don't have to worry about other applications masquerading as your application as only your application can set the byline with your application name;
will eventually have access to more APIs from Twitter that will only be available to "trusted" OAuth-enabled applications; and
give the @twitterapi team more visibility into the network — you help us identify your application when there are bugs, you help us plan for capacity, and you help us squash spam.