Note:
Drupal 6 installations should use the site network module : http://drupal.org/project/site_network
Distributed authentication
One of most dreaded obstacles users are confronted with these days is the need to continually create new accounts for themselves at every website they come across. Logging into a website to check out it's features should be a fun process, not a chore. Forcing each visiting user to create a new account by filling out your carefully crafted registration form is tedious, boring, and repulsive. Luckily for Drupal users, there's a built in system that removes a lot of this drudgery. It's called Distributed Authentication, and it's built into the core.
For example, on groups.drupal.org, you do not have to fill out a registration form if you are already a member of drupal.org. This capability is fantastic for getting users to instantaneously interact with your site if they happen to already be a member of a sister site.
Enabling the feature
To enable this feature, turn on the 'drupal' module at Administer > Site Building > Modules (D5), and configure it at Administer > Site Configuration > Distributed authentication.
The Settings
Authentication service: Enabled
Default authentication server: (the URL of the master authentication server)