When you start up with the Live CD, you need to enter either as "guest" or as "root" and the passwords are displayed on the screen. If you then decide to install, such a process requires "root" or admin privileges and, after intallation is complete, you get to set your own root and user password.
The reason for this is as bbfuller mentioned. Linux divides it setup into two parts. The main and potentially vulnerable part is protected from internet interference behind a root password. Your home files - emails, photos etc are the only parts that are "exposed" on line, if you get what I mean. This is the security strength of Linux especially when compared with another operating system.
