I don't password mine. I also dowloaded the app "No Lock" from the market. I put a shortcut to it on my home screen. That way I can easily toggle screen locking on or off depending on the circumstances. I set the timeout to 15 seconds. With locking disabled, it is it wakes back up on power button push without going to the lock screen. If I am putting it in my pocket, I will usually toggle the lock screen back on.
I don't use a password but, when I travel I do. I also downloaded an app from the market called NoLock. It stops the lock screen from working but the phone still goes on standby. I have mine set for 2minutes. I love not having to swipe the lock screen all the time. When I'm carrying it around though, I disable NoLock to make sure my phone can't dial out.
Thanks for the "no lock" solution guys. In the back of my mind I was always worried that the power button would wear out since you had to press it to get the screen to light up. Now I can wear out the volume button lol