The "Thompson hack" (as it's called in the book, though I've never heard it directly referred to as such) refers to a hack that Ken Thompson, the creator of Unix (which is a story in itself—Multics wouldn't run his game, so he wrote his own OS) is reputed to have hacked the
login
program such that it would always let him in on a certain account name and password, even if that account didn't exist on the machine in question. Since Unix source code was easy for any system admin to get a hold of then, the problem was making this personal backdoor undetectable even when someone audited the source code. So, he hacked the C compiler to notice when it was being asked to compile login
and secretly insert the code that would make the backdoor work.The result is a program which does one thing, but has source code with says it does another. Of course, you might wonder, what if the system admin reads the source code for the C compiler and notices what it's written to do? What else: Thompson hacked a copy of the C compiler to recognise itself being compiled and to insert the appropriate code into the final executable compiler.
It makes me wonder whether Charles Stross just wrote a smart book, or if he just indulged himself by hiding geeky Easter eggs, knowing his target audience so well.
Edit: The original source of this story is noted in the Jargon File entry for "backdoor".
(some evidence suggests "true" however)
Amusing as all heck and why open-source compilers are suggested.... but also why they can bootstrap from other types of systems. Somewhere or another it can be proven the code hasn't had that introduced :)