This is the T2 SDE (System Development Environment) Live CD.
Since having a default password is very unsecure if the box is connected to a network and services are started (such as ssh, http, ftp, ...) the Live CD does not allow root login by default. The only login allowed is the password-less "live" account.
In order to gain root privileges run use sudo:
sudo bash --login
Once root you can of course enable the account by seting a password (via passwd).
We strongly recomment to set a live password when you start remote services such as ssh, http, ... or work for a longer time in the live system:
passwd
Please provide feedback about problems you experience, ideas for future improvements or just that it works for you to the T2 mailing list.