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This bugged me for a while too because 1and1's exchange hosting server has the same security policy. I was able to change the time, but the option to turn the password off is locked out. I finally found out that you can change the registry key to disable policies:
HKLM\Security\Policies\00001023
0 = Enabled; 1 = Disabled
The Zenyee StayUnlock runs in the background and monitors that key, setting it back to 1 if it changes. I would try a manual reg key change first - my Touch hasn't prompted me to set up the password settings again since I disabled it. If you do the reg hack and it gets reset by the server, then you can install the Zenyee software to keep it monitored. The less I have running on mine, the better, personally.
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