source: http://www.securityfocus.com/bid/33872/info

Magento is prone to multiple cross-site scripting vulnerabilities because it fails to sufficiently sanitize user-supplied input.

Attacker-supplied HTML and script code would execute in the context of the affected site, potentially allowing the attacker to steal cookie-based authentication credentials.

Magento 1.2.0 is vulnerable; other versions may also be affected. 

http://www.example.com/index.php/admin/
Username: "><script>alert('xss')</script>