Hi Carl,
Let me explain with Example..
lets say you have 4 AP's .. Out of which one is acting WDS Master..and other 3 as normal AP's.
The username and password define on AP's are used for authentication. AP's authentication can be done by WDS master or Radius server if you are using one.
The purpose is to protect your network .. somebody else can particiate in your WLAN network by adding his AP.. and can missup
All Ap's which are needed to participate in WDS need to get authenticated or we can say register with MASTER WDS AP.
Rest,AP's will relay the wireless client authenticatin request to WDS master or radius server.
Here are the configuration link for your reference .... no WLSE is involved.
http://www.cisco.com/en/US/products/hw/wireless/ps4570/products_configuration_example09186a00801c951f.shtml
Wireless Domain Services AP as an AAA Server Configuration Example
http://www.cisco.com/en/US/products/hw/wireless/ps458/products_configuration_example09186a008059a559.shtml
Hope this helps..
Pls rate if this works for you so that other can take benefit of this forum