Thanks to the responders... I did a little more checking as to why we do this for routers we manage... it's like keeping one line for yourself on a conference call with limited lines available.
Yes -you can have different passwords...
line vty 0 3
login
password 1234pass
line vty 4
login
password dontuse
In a device that we access in addition to the customer, we put in a backdoor(vty 4) so that in the event of a problem in a router with the customer, Engineers, other vendors, all telnetted in (or through), they could run out of connections, but I with my different password, could still get in. If the '1234pass' didn't work because it was "full", I could use 'dontuse'.
I could see this being handy for a router doubling as a terminal server.