This is for a 3.4.7 modified, but you should get the general idea , other 3.4.x should be similar.
Code:
<TD vAlign=top align=left>
{* <input type=password name="passwd1" id="passwrd1" maxlength="32" style="WIDTH: 200px" value="{$userinfo.passwd1}"> *}
<INPUT {if $usertype eq "A" or $usertype eq "P"} type=text {else} type="password" {/if} id="passwd1" name="passwd1" size="32" maxlength="32" value="{$userinfo.passwd1}">
</TD>
</TR>
<TR>
<TD vAlign=top align=left>[img]{$http_location}/{$ImagesDir|replace:[/img]</TD>
</TR>
<TR>
<TD vAlign=top align=left>
{* <input type=password name="passwd2" id="passwrd2" maxlength="32" style="WIDTH: 200px" value="{$userinfo.passwd2}"> *}
<INPUT {if $usertype eq "A" or $usertype eq "P"} type=text {else} type="password" {/if} id="passwd2" name="passwrd2" size="32" maxlength="32" value="{$userinfo.passwd2}">
Nice mod Carrie - kudos
LeeD