well then is it possible to place the popup window in a certain location relative to the application window?
To answer your question: no.
You don't own the window. Your application doesn't own the window. You don't have access to the window or anything about it.
And this is how it should be. It isolates you and the token for privileges away from the user's password. And it isn't just about keeping you away from the password. What if your tool runs on the network? Any bug on your part could turn into exposing a user's password to attackers. SIMBL plugins technically could access the password as well if they knew what they were looking for (did they ever fix the huge risk these guys posed by letting them run in every process?).
Because the window lives outside your control, it is centered in the screen. Again, this is how it should be. It grabs the user's attention that something wants to elevate, and has details on who is trying to elevate. While the Vista method of overlaying the UAC dialog over the window of the app requesting privs is kinda nice... it isn't any more correct than Apple's way. They are both correct for different reasons. I wouldn't bend over backwards trying to re-engineer the authentication mechanism here, because in the end, you are spinning your wheels on something that is quite trivial. I just don't see that you would get enough user benefit here to make it worth the time to reimplement the window, and it could serve to confuse the user as others stated, which is the opposite of what you want to do.
And don't let other apps that have gone off the beaten path influence your judgement. Either an idea has merit or it doesn't on its own standing. And personally, I don't think taking over authentication dialog has merit. Sure, OnyX does it, but it doesn't mean that OnyX's developer is right.
I just tried the app out, and running it caused it to just start doing things without telling me what all will be involved, why it needs the password, or what giving it the password gets me. And this is after I had to give admin permissions to an installer that only copies a .app. Basically, the developer of OnyX did a whole chain of things that I would consider to be bad ideas on deployment, security, and what to do on first launch.
I still don't know what OnyX is supposed to help me do, because I wasn't allowed to see the interface until it got my password.
Bad.