Removing the password requirement all together would require all of the same steps plus a couple more. In addition to getting rid of the client side validations you would need to get rid of this part of the form itself and also the server side validations for the password.
You would still need to have the random password generated and use this value in place of the posted password in the insert server behavior for the user.
Please explain where you are having trouble with this and what the current result is and I will help you out with whatever I can.