This plugin by SteveGrunwell generates a random password (via Ajax) for new users created through wp-admin/user-new.php.
When administrators create new users through the WordPress admin interface (wp-admin/user-new.php), they are forced to come up with a password for the new user. The administrator is faced with a choice: use a separate password generator app or waste precious time coming up with a clever password only one person will ever see.
WP-Password Generator takes the hassle out of creating new or insecure passwords. Simply click “Generate Password” and your user has a unique, 7-16 character password.
Download and info: http://wordpress.org/extend/plugins/wp-password-generator/