You can let users select their own password or create an automatic password in UPME registration. User selected passwords is the most popular choice. You can use the UPME Settings -> Registration Options -> User Selected Passwords setting to configure the registration password as shown in the following screenshot.

reg_pass_1

You can use the available options to allows users to set the password or email a random password. Also you have to consider that User Profile Approval and Email Confirmation features are only available when you enable user selected passwords in registration.