I've noticed that when using shadow passwords, the
command 'usermod -p <encrypted password> user' updates the
entry in /etc/shadow, but also creates an entry in
/etc/passwd! I've tested it with the RPM that came with RedHat 6.0
and with latest RPM available (shadow-utils-19990827-2.i386.rpm)
and in two different machines.
Happens here too... Working on it.