Why is Ctrl+Alt+Del required at login on certain Windows systems (I have not seen it elsewhere, but contradict me if I'm wrong) before the password can be typed in? From a usability point of view, it's a bad idea as it's adding an extra step in getting access.

Does it improve security in any way, and if so, how?

This combination is called a Secure attention key. The Windows kernel is "wired" to notify Winlogon and nobody else about this combination. In this way, when you press Ctrl+Alt+Del, you can be sure† that you're typing your password in the real login form and not some other fake process trying to steal your password. For example, an application which looks exactly like the windows login.

In Linux, there's a loosely-defined equivalent which is Ctrl+Alt+Pause. However, it doesn't exactly do the same thing. It kills everything except where you're trying to input your password. So far, there's no actual equivalent that would work when running X.

† This implies a trust in the integrity of the system itself, it's still possible to patch the kernel and override this behaviour for other purposes (malicious or completely legitimate) 
