The computer models listed above may display a “Password =” prompt when the computer is turned on, even though no power-on password has been set. If this happens, there is no password that will satisfy the password request. If the computer is turned off and back on again, it is very likely that the same password prompt will appear. The computer will be unusable until this problem is fixed.

If the problem has not happened yet, you can prevent it from happening in the future by upgrading the BIOS to the newest version.

The occurrence of this problem on any particular computer is unpredictable — it may never happen, but it could happen any time that the computer is turned on. If this problem does occur, it will be necessary to send the computer to a Toshiba Authorized Service Provider, who will fix the problem at no charge to you.

Did you see that? TOSHIBA WILL FIX THE PROBLEM AT NO CHARGE TO YOU.

Here’s a list of Toshiba laptops affected by this problem:

Apparently, this laptop sets the password by itself because of some kind of glitch in the earlier BIOS releases. I believe this problem was fixed with the latest BIOS release.
But how can you upgrade the laptop BIOS to the latest version if you cannot bypass the password?
1. If the laptop is still under warranty take it to an authorized repair center. They should clear the BIOS password without any charge.
2. If the laptop is not under warranty, you can try to clear the BIOS password yourself. You’ll find instructions here and here.
After the password has been cleared, upgrade the laptop BIOS to the latest version. You can download it from the Toshiba website.

UPDATE: My Toshiba laptop displays Password= prompt on startup

These instructions explain how you can clear the BIOS password from older Toshiba laptops.
The article is written in German so I’ll ad some comments in English.
In order to clear the BIOS password you’ll have to create a plug for the laptop parallel port. You can make the plug from a parallel port connector for printers, known as DB25. Find an old parallel port connector, take it apart and solder pins inside the connector as described below.
Solder the following pins together:
Pins 1,5,10
Pins 2,11
Pins 3,17
Pins 4,12
Pins 6,16
Pins 7,13
Pins 8,14
Pins 9,15
Pins 18 through 25. The article says connect pin 18 to 25 but on my plug I connected pins 18,19,20, 21,22,23,24,25 together and it works great.
After all needed pins were connected, assemble the connector.

Here’s how you clear the BIOS password. Turn off the laptop, plug the connector into the parallel port on the back or side of your laptop, turn on the laptop while the connector is still plugged. The laptop will boot into the operating system without asking the BIOS password.

This method should work for the following Toshiba laptops:
Libretto 50-110, Portege 610-7220, Satellite 100-1800, Satellite 2060-5200, Satellite A10, A20, A40, Satellite Pro 400-6100, Tecra 500-9100, Tecra A1, A2, TE200, TE2100, Qosmio E10 and some other older Toshiba laptops.

This method will not work for the following Toshiba laptops:
Portege A100, M100, M200, R100, Satellite M30, Satellite Pro M10, M15, Tecra M1 and M2, Satellite 1905, 1955, A30, A70, A75, M30X, M35X, P10, P15, P25 and some other older laptops.

I don’t know all Toshiba models you can use this plug for, but if you have an older Toshiba laptop this method is worth trying.

UPDATE: All owners of newer Toshiba laptops should read this post. My Toshiba laptop displays Password= prompt on startup