This method isn't as romantic as it sounds. It basically involves the hacker lying to a user, in order for them to obtain information, in this case, your password. Here's one simple example of social engineering.
The phone rings:
Hacker: Hi, this is Mike from Dial-Ups-USA.
You: Ah, you're the ones I get my Internet access through, right?
Hacker: Yeah. That's why I'm calling. Have you tried to access your e-mail today?
You: No, I've had a busy day, why?
Hacker: I know how those go. I've had a busy today too. We had a problem with our mail server. It crashed and all of the user accounts were deleted.
You: Oh, I guess you have been busy then. How long will my account be down?
Hacker: Well, hopefully within the next few minutes. I'm the lucky guy that got chosen to call all of our users and re-establish their accounts. Do you remember what your username is?
Hacker: Yes, that would be the part of your e-mail address that comes before the @ sign.
You: Oh, that would be 'John20' then.
Hacker: Ok, great. I'll add that in here right now.
You: Ok, thanks.
Hacker: What would you like your password to be?
You: Do I need to pick a new one, or can I use the same one that I used before?
Hacker: You can go ahead and use the same one as before.
You: Ok, make it 'YouGotMe' again. This way I won't have to try to remember a new one.
Hacker: Give me a minute to enter it.....Ok, you're all set. The account should be re-activated within the next 10 minutes or so.
You: Ok thanks, I appreciate that.
Hacker: No problem, have a nice day.
You: You too...
I can hear you saying it now. "I'd never fall for something like that." Hackers pray on one simple fact about the average user. If something seems "wrong" to a user, or "out of the ordinary", they almost ALWAYS assume it's because they aren't the expert "Well, I'm not sure what he's talking about, but I don't know a lot about computers, so he must be right."
How do you protect yourself from this type of attack? Have self confidence, and use your common sense. If it walks like a hacker and talks like a hacker, it's probably a hacker.