Auto Password Generating & Emailing

When someone signs up, the password is created for them, and they receive an email with their new password, and are unable to log in until this occurs, kind of like these support forums.

MY QUESTION;

How do I set it up so the blog itself generates a password for each user to signs up, and auto emails them the password?

I have yet to figure this out, and if it is possible, an explanation on how to do it, would be AWESOME!!!!

Thanks.