Password Log-In Issues!

I need some help here please! Everytime a member signs-up and creates a user name & password they are unable to log-in with that passord, also the activation key they are emailed does not work. Then they have to click on forgot password go to their email click on a following link to confirm this is ok to do, go back to their email and retreieve a new difficult password to log-in! Once they have logged in no one seems to know where to go to change this password to something more memorable? why is this happening? And how do I get it to stop? Thanks!