You should never mail them their password.
If you don't have many (none

) normal (by the user) new registrations a day, you could do the following:
- Create the new users and put them in the 'Awaiting Email Confirmation' usergroup.
- Go to AdminCP->Users->Send Mail to Users
- Select to send mail to all users in the 'Users Awaiting Email Confirmation' usergroup only. You can ofcourse use more selection criteria, like registration date, etc..
- Send them a mail with the $activateid & $activatelink
- They will receive a mail to activate their account and set a password.
If you have many users signing up themself a day, you could do the same, but for making it easier to select them, you can fill out one of the User Profile Fields when you create the user, with a word that makes it easy for you to select them when you send out the mail.