Edit: Coming back to this answer after a year of security research, I realize it makes the rather unfortunate implication that you would ever actually compare plaintext passwords. Please don't. Use a secure one-way hash with a salt and a reasonable number of iterations. Consider using a library: this stuff is hard to get right!
Original answer: What about the fact that String.equals() uses short-circuit evaluation, and is therefore vulnerable to a timing attack? It may be unlikely, but you could theoretically time the password comparison in order to determine the correct sequence of characters.
public boolean equals(Object anObject) {
if (this == anObject) {
return true;
}
if (anObject instanceof String) {
String anotherString = (String)anObject;
int n = value.length;
// Quits here if Strings are different lengths.
if (n == anotherString.value.length) {
char v1[] = value;
char v2[] = anotherString.value;
int i = 0;
// Quits here at first different character.
while (n-- != 0) {
if (v1[i] != v2[i])
return false;
i++;
}
return true;
}
}
return false;
}
Some more resources on timing attacks: