Safe Place not only requires a password to view your data, it also encrypts your data while it's stored on disk.
First, Safe Place does not actually store your master password (the one you need when you start the program). Instead, only a checksum (the result of a mathematical calculation applied to the characters in your password) is actually stored. When you start the program and enter your password, Safe Place applies this same calculation to the password you enter, and compares it to the value it stored when you first used the database (or last changed your password). If the values match, you're allowed to work with the database.
But that's not all. Safe Place uses the characters you entered as a "key" to the encrypted data stored in its data file. Even if an unauthorized user got past the password dialog, or viewed the data file with another program, they wouldn't be able to see anything other than apparently random characters without this key. And since Safe Place doesn't store the key with the data, they're outta luck.
Here's the rub: Because your password is not actually stored in the database, it is not possible for anyone to determine your master password. Not even the author of this program. If you lose your password, you'll never be able to get into the encrypted data again. Even if we could get you past the login dialog (okay, we could do that much), you'd only be able to see the encrypted data. Without the original password as the key, the data is useless.
Not all of the data in the database is encrypted. To keep things speedy, each password record's name field is left unencrypted. This allows Safe Place to handle hundreds of thousands of records without slowing down.
See the The Master Password topic for more information.