Please allow me asking you why you are running PI Server 2012 (the latest bits) with ProcessBook 2.1? This ProcessBook release originates from the last century. Please consider using the current release: ProcessBook PI ProcessBook 2012 SP2 (188.8.131.52)
Starting version 3.x ProcessBook is using PI SDK to connect to the PI Server. Earlier versions where using PI API. PI API doesn't support Windows Integrated Security (WIS) but allows authentication based on a PI Trust or (default) user login. The reason ProcessBook 2.1 is prompting you for the password is that default user login is either the preferred authentication method (see PI SDK client settings) or the attempt to connect via PI Trust has failed. Also pidemo appears to be the default user set up within the clients connection settings.
To answer your question, per default the password for pidemo is empty (no password).