Change Account Password to Blank
Solution 1:
The passwd command rejects the idea that you can have a 0 length password.
Instead use dscl which is more accepting of the notion that the password is nothing.
dscl . -passwd /Users/foo
You can press enter to make the new password blank and then may get an error and have to enter the old password if you are not root
Once you authenticate (or are root already) the blank password will be set for the account in question.
Solution 2:
You can set the account password to no password using the Users and Groups Pane in System Preferences.