How does CTRL-ALT-DEL to log in make Windows more secure?

The Windows (NT) kernel is designed to reserve the notification of this key combination to a single process: Winlogon. So, as long as the Windows installation itself is working as it should - no third party application can respond to this key combination (if it could, it could present a fake logon window and keylog your password ;)

CTRL+ALT+DEL the history

Actually, I was just trying to solve a development problem that we had: brand new hardware, brand new software, you're testing this stuff out, it would hang up all the time. So the only solution you had was to turn the power off, wait a few seconds, turn the power back on, wait for it to go through the power on self test. I said, I'm writing all this code for the keyboard, I can .. let's just shortcut it. I originally intended for it to be what we would now call an easter egg, just something we were using in development, it wouldn't be available elsewhere. But then the pubs people found out about it. They're trying to figure out how to tell somebody to start up one of their programs, and they had the answer: just put the diskette in, hit CTRL+ALT+DEL, and by magic your program starts. So, it was like a five minute job in doing it. I didn't realize that I was going to create a cultural icon when I did it. But I have to share the credit; I may have invented it, but I think Bill [Gates] made it famous.

http://www.youtube.com/watch?v=1zADyh0JQh8

Quite a funny and informative clip, actually!

Ctrl-Alt-Del is a Secure Attention Key that helps to prevent login spoofing.