Just found this article from 3 days ago that shows you exactly how to modify the wp 2.2 login to do this. Even gives you the file pre editied!
http://weak.org.uk/2007/05/22/wordpress-hack-users-choose-their-own-password/
Can someone please provide the file or directions to do this? The guy that made it doesnt have it on his site anymore and I can’t find a way to contact him. Does this work with wordpress 2,2?
Thanks!