If you're talking about Ektron CMS400 Membership Users, you can use the Web Service Method:
User.ResetMembershipUserPassword
If you're trying to set it for regular CMS400 users, you're out of luck. The administrator will need to reset their password (if they've forgotten it) and the user will need to log back in to the workarea and change their password there.
UPDATE
That method resets the password to a random value. To set the password to a desired value, you'll have to use:
Ektron.Cms.BusinessApi.dll
Ektron.Cms.UserAPI.ResetMembershipUserPassword(string Username, string oldPassword, string newPassword)