Here System.in is set to FileInputStream(FileDescriptor.in), wrapped the same in InputStreamReader and opened new channle for System.in.
  When console.readPassword() follows ReadableByteChannel.read(bytebuffer.allocate(6)), it reads the characters left in the Buffer which are visible in command prompt.
  But when console.readPassword() follows InputStreamReader.read(ch[],int,len) , we can type for the password in echo off mode, even though characters are left in buffer.This should be the behaviour for previous case.

  Please see the version,code and Result.
<version>
java version "1.6.0-tbell_2005_11_29.17.38.41"
Java(TM) 2 Runtime Environment, Standard Edition (build1.6.0-tbell_2005_11_29.17.38.41-b333)
Java HotSpot(TM) Client VM (build 1.6.0-rc-b61, mixed mode)
</version>
<Code>
import java.io.Console;
import java.io.InputStreamReader;
import java.io.FileDescriptor;
import java.io.FileInputStream;
import java.io.IOException;
import java.nio.channels.Channels;
import java.nio.channels.ReadableByteChannel;
import java.nio.ByteBuffer;
   class TestConsole {
public static void main(String... args) throws IOException {

ByteBuffer bb = ByteBuffer.allocate(5);
char ch1[]=null;
char ch2[]=new char[5];
char ch3[]=null;
FileInputStream fis = new FileInputStream(FileDescriptor.in);
            System.setIn(fis);

InputStreamReader isr = new InputStreamReader(System.in);
ReadableByteChannel rbc = Channels.newChannel(System.in);

Console con = System.console();
if ( con != null) {
            //Test1
con.printf("input1 :");
rbc.read(bb);
con.printf("Password1 :");
ch1=con.readPassword();
            //Test2
            con.printf("\ninput2 :");
isr.read(ch2,0,5);
con.printf("Password2 :");
ch3=con.readPassword();

con.format("\n\n\nOutput:\ninput1 :%s \nPassword1 :%s\n",new String(bb.array()),new String(ch1));
con.format("input2 :%s \nPassword2 :%s",new String(ch2),new String(ch3));
}

}
   }
</Code>
<Output>
C:\work>java TestConsole
input1 :User Name
Password1 :

input2 :User Name
Password2 :

Output:
input1 :User
Password1 :Name
input2 :User
Password2 :Password
</Output>