Apologies if I have missed topics which have already brought this issue to light.
After installing the latest security update: "Mac OS X wants to use keychain system". When I keyed in the only password I have set for this computer, it was rejected. Then when I looked at the keychain access app, my password would open keychain login and show password for each item in the keychain. But when I key in the same password to get the password for the only item in the system keychain [airport network password] this password is similarly rejected.

Help or links would be very much appreciated.
Thanks in advance.

Hmmm...

I don't recall running across your issue before; you probably haven't missed anything.

The only guess I can hazzard is that perhaps System.keychain is looking for a "no-password" password.

Next time you get that password request try clicking the OK radio button without entering anything, and let us know what happpens.

Sorry, but I forgot to mention that you also ought to try running Keychain First Aid which (in Panther, at any rate) can be found under "Window" in the Keychain Access menu bar.

In Tiger, keychain first aid is found under the Keychain Access menu.

Simplest solution for most keychain problems is just to delete the keychain. It contains information that you shoudl already know, with the exception of the safari forms autofill key which safari generated randomly.

After you delete your keychain, run mail and type in your mail password and have it remember it again. Then go into safari and go to google.com so safari will set back up its forms autofill.

You'll run into a series of dialogs. First one usually says the keychain was not found, do you want to reset to defaults. This is fine. Then it will probably ask you another question about the keychain, allow this also. That should straighten you out.

BTW, the airport passwords are NOT stored in your keychain. They are actually stored in an encrypted entry in the system keychain, so that all users have access to the WAP, not just you. Under 10.2 you can actually fish it out. Under 10.3 and later, the entry is not merely binhexed, but is actually encrypted, and I have not figured out how to decode it yet. I have never played with deleting the system keychain, but in theory it shouldn't mind any more than deleting your own personal keychain.

Thanks to everyone for your replies.
I have run keychain first-aid to no avail.
The thing is, I am now being asked for the keychain password for the system keychain and I have never set a password for this keychain. The log-in keychain can be opened auatomatically and with my log-in password without problems but not the system keychain. In effect, it is asking me to provide a keychain password which I have never set. The only item in the system keychain is the netgear router and the password is located in Airport Network. This is very baffling because it only began to happen after I installed the latest security update for OS 10.4.2.
[edit] Have also tried clicking the ok radio button without entering anything and am still getting "invalid password"
Deleted the keychain which disabled airport - there was no way I could turn airport on and connect to the internet. So, replaced the keychain from backup.

I think you may be worrying for nothing to think there is something wrong with the System keychain – that what you are observing is 'correct behaviour'. A few weeks ago I was running Keychain Access – which I tend to do whenever the moon turns blue – when I noticed exactly what you report: System Keychain with just one entry, AirPort Network Password, and the non-acceptance of my password, non-acceptance of no password…, i.e. all as you have described. Having, like you, a backup, I trashed the Keychain and, if I recall correctly it was only re-created after a re-boot. I launched Keychain Access again and discovered that the endeavour had been a waste of time – I could still not get any access to that System keychain.

I suspect that this has to do with what Virtual1 wrote above about the encryption being used. Anyway, as everything was (and is) working fine, I just shrugged my shoulders, told myself that if it ain't bust… – and forgot about it until I saw your post.

So what's the point of telling you all that? It seems obvious that trying to deal with the glitch via Keychain Access is futile. I suggest two things: 1) play around with AirPort Admin Utility and with System Preferences > Network (more likely the former) and hope that at some stage you will get one of those dialogs that asks if you want the password stored, 2) download and run the Mac OS 10.4.2 Combo Updater which probably won't help (!) but just might and certainly can't do any harm.

Thanks for your reply Andreas.
I have already installed the combo updater in the hope of a fix but it didn't work.
I agree there isn't anything to worry about regarding system keychain but what brought this to light, was that after I had installed the latest security update, this: "Mac OS X wants to use keychain system". When I keyed in my log in password to allow Mac OS X to use keychain system it was rejected invalid. I have received this request once more since then. I am puzzled as to why Mac OS X can't just use keychain system without asking for a password which I didn't set. Apple tech support haven't been able to explain why I can't give permission for Mac OS X to use keychain system.

If Apple tech support has no idea it seems ludicrous for me to say anything but you did say that you (re)moved the System keychain and then, because you couldn't get a connection, you restored from your backup. As you have that backup for a 'just-in-case' why not try a variation: delete the keychain and re-boot (or still better shut down, wait a minute, and re-start). On my experience the System keychain should be rebuilt for you – and see if that brings any joy. If you want to give that a try, and if you shut down, then you could add the extra step of holding Cmnd-Opt-P-R on the re-start for 2 or 3 'bongs' to rebuild both PRAM and NVRAM; probably totally irrelevant but why not. It would also be good at this stage to use whatever gizmo you have for thoroughly cleaning caches (Applejack is prob one of the best/most thorough/safest, but use whichever you have).

If by chance the System keychain does not get re-created (I wd be surprised) don't rush to get the backup but try clicking on items in AirPort Admin Utility to see if you can get a dialog which relates to the keychain. If that brings no joy you could try seeing how AirPort Setup Assistant responds. What I am getting at is forcing the OS to re-create that keychain rather than you restoring it. Good luck!

BTW, I don't expect you to have to reach for your backup copy but if you do I think you should immediately repair permissions because by having moved it you will have become the owner which is of course not correct.

Can't say as I know exactly how all this works, but when I go into Keychain Access, I can see my system keychain, which is locked. When I click to unlock it, it just unlocks, it does not ask me for a password. Maybe this is because I am an admin? Not sure. The only two passwords in my system keychain are both wireless access point passwords.

I have also dragged in my certificates and anchors keychains, as well as my filevault master certificate. The filevault password is the master password to the computer. The anchors and certificates keychains I cannot seem to unlock, which is odd because I seem to recall having done that before. Strange...