We're currently investigating what kind of authentication we want to use for a sharepoint portal site : Forms Authentication or Windows Authentication. The latter has my preference.
What suprised me (I'm a sharepoint noob), is the fact that MS didn't provide a component/web-part that handles account management when using Windows Authentication.
Do you now how to do this? Without resorting to buying an additional product. Shouldn't it be very easy to access the Active Directory by code (C#)?
It's much easier to just use the regular AD management tools provided with Windows rather than trying to manage your users' permissions through a web interface (for groups and such).
...of course you'll need access to make changes to your AD structure to administer the security.
Another alternative you may want to consider is using Forms Authentication using the Active Directory provider. It'll allow you to use the Forms Auth user admin tools and still authenticate against an Active Directory environment.
Windows Authentication
I echo Justin's thoughts regarding AD management. Adding users to your domain also doesn't necessarily have anything to do with adding them to SharePoint. However perhaps there is an IIS add-on that does this if you wish to pursue it.
If you don't already know, SharePoint can automatically import user profiles from your Active Directory domain. This makes them available for assigning permissions within the sites.
Some additional info from Justin's comment about changing the AD structure to administer security: With SharePoint 2007 you no longer need to rely on Active Directory to manage groups of users. It's possible to also use SharePoint groups (which can contain AD users or AD groups). This works really well when you need to create a group for a purpose that isn't applicable outside SharePoint and you don't want to bug the infrastructure team. The downside is that without education, end users probably won't manage this well and it can become a mess.
Forms Authentication
It's true there is very little provided by Microsoft for managing this. However the Community Kit for SharePoint provides this functionality. From memory I had to tweak their code a bit but I was generally happy with it.
If you are considering this option also read this MSDN article.
IF this is for users who are not a part of your actual domain (i.e. extranet users), I suggest you take a look at ADAM, Active Directory in Application Mode. It behaves the same as regular AD, can be administered through the windows.
Also, take a look at the following codeplex project, ADSelfService, it allows users to edit their own AD profiles. Perhaps you can extend the code yourself to allow admins to edit all profiles.