I'm setting up my forum in order for there to only be anonymous posting, so I dont want the password option there to confuse people. Anyone know a way to get rid of it??

Would be SO grateful!

You can remove it from the template files.. Unless it's possible to do it via bb_plugins (I'm sure you'd want to get back to the original settings - with password - after a couple of months or less ;).

I suppose only one template needs to be modified...

user_login_form.html

And probably you could remove logging box {$user_logging} from main_forums.html