Re:Please explain (Score 2, Informative)

A practical application of this is at http://www.cypherpunks.ca/otr/ (with a plugin for a few common AIM application, most usefully for pidgin née gaim).

This one has an implementation called the "Socialist Millionaires Problem", which sounds the same, although I recall it being used only to tell if two secret values are the same on both side, thus augmenting the key exchange protocol with man-in-the-middle detection capabilities, provided the parties has shared knowledge about something (and something reasonably private).