The Password server is required to use remote IMail Administrator. It also allows older POP3 mail clients change their IMail Server password without logging in to the server.
These older mail clients (including older versions of Eudora) have the ability to use the POP3 protocol to change passwords remotely. As a Windows service, the Password service can run completely hidden or with some feedback. The Password server continues to run when you log off the Windows system. IMail Server does not require the Password server to be running for normal operations.