The .net password setup is for using a microsoft passport which allows you to use passport services (i.e. hotmail). It isnt necessary to set this up though. I believe all it does is tell you if you have new mail in your hotmail account (thats all it does for me anyway, and even then, it doesnt update right lol). And if you dont set it up now, you can set it up at www.msn.com, or www.hotmail.com so dont worry about it.