I don't know why this happens. It's really rare - I think it's because DC runs some binary code which is getting corrupted in a Windows garbage collection, and causes the live ID thing to be thrown up. In any case, don't enter anything and cancel.
I observed the same thing: at the end of the scan, there was a windows asking for the Windows Live ID. I had to cancel twice, then the scan competed correctly.
I've looked into this a bit more and I think DC is trying to access the MSN web folder (XP only?), which is kind of a virtual online folder - hence the password request. The folder can be deleted if you don't use it or you can cancel the password request.
Hi: At the end of a session, my ZoneAlarm pops up indicating that DC is trying to access the Internet - is this part of the LiveSign error mentioned elsewhere in this forum? I've been hitting the ZA "Deny" key when it happens.