Not exactly. More like allowing admin to see pages rendered as THOUGH they were logged in as the user. Check the cookie to see that admin is who's logged in, and then an additional arg of the user ID# is passed to a page, and if it's admin looking, it generates the page from that user's point of view.
Or, more along the lines you summarized: perhaps a mod to the login process and cookie-checking which allows admin's password to work as an "alternate" password for any given account. ie: JoeBlow is complaining about something, but we cannot duplicate it and he's not giving good enough information to discern what the issue is. So, I login using JoeBlow as the nickname, but using admin's password instead of JoeBlow's (because, of course, I don't know it, and it's encrypted), and Dolphin treats me as though I were JoeBlow.
Granted, that's a bit of a security risk on one hand, if someone found out what admin's password were, they could log in as anyone, but then... if someone found out admin's password, they could log in as admin and do far more damage, so it's a risk that's already in place.