Wordpress - How to change a user's password programatically

wp_set_password( $password, $user_id );

See reference for details.

A simple wp_update_user(array('ID' => $userid, 'user_pass' => 'myNeWpaSSword')) will do everything for you - wp_update_user() (Codex).

On a sidenote: are you aware of the Theme My Login (Wordpress Plugin)? It can provide you with a front-end side profile page.