To remove the phone number from the registration you can just remove the form field:
<input name="UserPhone" type="text" class="WAATKTextField" id="UserPhone" onBlur="if (document.getElementById('PhoneServerValidation')) document.getElementById('PhoneServerValidation').style.display='none';WAValidatePN(document.forms[0].UserPhone,'- Invalid phone number',false,true,'x (xxx) xxx-xxxx',document.forms[0].UserPhone,0,true)" value="<?php echo(ValidatedField("usersRegistration","UserPhone")) ?>" size="32" />
Then you need to remove at least the server side validation:
$WAFV_Errors .= WAValidatePN(((isset($_POST["UserPhone"]))?$_POST["UserPhone"]:"") . "",false,true,true,13);
This will get rid of the field for you. You should also remove the spry validation code for this but it will not be necessary:
var sprytextfield4 = new Spry.Widget.ValidationTextField("sprytextfield4", "none", {validateOn:["blur"], minChars:7, maxChars:20});
Please describe exactly how you would like to make it so that any password works. The way the user registration currently works is to have a user register with username, password and other details. When the user returns to the site they must enter the same username and password they used to register to login to the site. Please describe how you would like it to work differently.