[Imaginos]

Hard reset means you have to setup your exchange partnership again. At that time, your device will be reprovisioned on the server and any security policy will be reapplied.

If you are not happy with agreeing to the security requirements (password security on your handheld?) set by your IT admins on the server, you probably shouldn't use it. Security requirements are for the protection of server data in the event that a handheld is lost. As an admin, if I found a user bypassing, tampering or otherwising compromising security on any connected PC, network device or IS, he'd be in a world of trouble.
If you're using a company phone, please don't let yourself be put in a similar situation.