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An article on Kerberos goes like this:

The problem is, Charon cannot give you the password directly, because then you would know it. [....]

So instead of giving you the mail server's password, Charon gives you a mail service TICKET. This ticket contains a version of your username that has been ENCRYPTED USING the MAIL SERVER'S PASSWORD.

What does it mean to encrypt a password using another password?

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up vote 8 down vote accepted

This is about real, reversible, symmetric encryption. It is not related to storing a one way hash of a password.

encryptedData = encrypt(data, key)
data = decrypt(encryptedData, key)

The very simple implementation of encrypt("bar", "foo") could return "hpg".

key is the shared secret known to both Charon and the mail service. The linked article calls this key a password.

data of course can be another password. But in this case it is not a password, but some information that Charon wants you to pass on to the mailserver. It is called Ticket. The symmetric encryption ensures that neither you nor anyone else can read it. More needs to be done in order to make it secure, but that is dealt with in later scenes of the play.

By the way Wikipedia has an explanations of Kerberos that is closer to the actual technique. The different way to present it may help to understand it.

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