Two problems:

a) users cannot set their password to be 
blank (empty) -- the form submission requires a non-empty 
password.

b) admin _can_ set user passwords to be blank, 
but such users cannot login through the web interface

We 
ran 0.4.3 with blank passwords for all users except admin -- our 
server is internal, our developers trustworthy, and I didn't want the "I 
forgot my Roundup password" hassle. Users with "legacy" blank 
passwords from the 0.4.3 instances can still log in with blank 
passwords under 0.5.0.

Logged In: YES 
user_id=113859

Try to delete the line
<input type="hidden" name=":required" value="password">

from the html/user.register

maybe that helps... for a)

Logged In: YES 
user_id=6405

I've checked in some fixes to make empty passwords possible.  You'll    
need to get the code from CVS or wait for the next release (the 
backends needed a fix to allow null passwords). 
 
If you can bear to use passwords in the mean time, please do so (I 
expect to have 0.5.1 out in a week or two, depending on bug severity 
and demand). 
 

Logged In: YES 
user_id=6405

I've checked in some fixes to make empty passwords possible.  You'll    
need to get the code from CVS or wait for the next release (the 
backends needed a fix to allow null passwords). 
 
If you can bear to use passwords in the mean time, please do so (I 
expect to have 0.5.1 out in a week or two, depending on bug severity 
and demand). 
 

Logged In: YES 
user_id=598066

The default 0.5.1 templates allow admin to create users 
with blank passwords, but don't allow users to register 
with blank passwords -- making the change Bengt 
suggests below enables this.