BPOS Sync Tool does not migrate passwords
Had this question come up today, so thought I'd drop a quick post on it. The Directory Synchronization tool used with Microsoft's Online Services does a one-way sync from your Active Directory up to the BPOS servers, and does not migrate passwords. You have to do those manually, and if you change a password in your local AD, it must be updated manually on the BPOS side.
See the Microsoft Online Services "About Directory Synchronization" page for the official wording on it.