I agree, I'll start looking into different authentication methods. cleartext, two way encryption, none, http-auth etc.

erm. accidentally removed suggestion by anonymous user that a .htaccess file may do the trick.

How's this:
Adding a parameter in config_inc.php that defaults to the current functionality. But you can change this parameter to http-auth.

Plus no matter what is selected, you can login like this:
<a href="http://username:<a href="mailto:password@bugs.site.com/mantis/filename.php3">http://username:password@bugs.site.com/mantis/filename.php3</a" target="_new">password@bugs.site.com/mantis/filename.php3">http://username:password@bugs.site.com/mantis/filename.php3</a</a>>
It would be nice if "filename" could be any file, I'll see what is possible when I start working at it.

I'll probably do this next time I work on Mantis. :)

This would be nice, but I think it could be done in a plugin if the api would allow for it.

I added http authentication in the CVS version of Mantis.
Comments welcome.

I'll consider this fixed for now. If there's any issues with it, please open a new bug.