Configuring OpenSSH for Windows in Cygwin - can't leave blank password

Question

I install OpenSSH in Cygwin under Windows 7 to install Hadoop.

I had OpenSSH installed previously, but with a password. All attempts to remove password are failed, so I re-installed Cygwin. I want OpenSSH without password too and followed these instructions.

However, it does not let me leave a password blank. Why is that and what should I do?

Additional info: I am running Cygwin bash with admin privileges. My Windows does not have a password set.

I see the following:

User@computer ~
$ chmod +r /etc/passwd

User@computer ~
$ chmod u+w /etc/passwd

User@computer ~
$ chmod +r /etc/group

User@computer ~
$ chmod u+w /etc/group

User@computer ~
$ chmod 755 /var

User@computer ~
$ touch /var/log/sshd.log

User@computer ~
$ chmod 664 /var/log/sshd.log

User@computer ~
$ ssh-host-config

*** Info: Generating /etc/ssh_host_key
*** Info: Generating /etc/ssh_host_rsa_key
*** Info: Generating /etc/ssh_host_dsa_key
*** Info: Generating /etc/ssh_host_ecdsa_key
*** Info: Creating default /etc/ssh_config file
*** Info: Creating default /etc/sshd_config file
*** Info: Privilege separation is set to yes by default since OpenSSH 3.3.
*** Info: However, this requires a non-privileged account called 'sshd'.
*** Info: For more info on privilege separation read /usr/share/doc/openssh/READ            ME.privsep.
*** Query: Should privilege separation be used? (yes/no) NO
*** Query: Should privilege separation be used? (yes/no) no
*** Info: Updating /etc/sshd_config file

*** Query: Do you want to install sshd as a service?
*** Query: (Say "no" if it is already installed as a service) (yes/no) yes
*** Query: Enter the value of CYGWIN for the daemon: []
*** Info: On Windows Server 2003, Windows Vista, and above, the
*** Info: SYSTEM account cannot setuid to other users -- a capability
*** Info: sshd requires.  You need to have or to create a privileged
*** Info: account.  This script will help you do so.

*** Info: You appear to be running Windows XP 64bit, Windows 2003 Server,
*** Info: or later.  On these systems, it's not possible to use the LocalSystem
*** Info: account for services that can change the user id without an
*** Info: explicit password (such as passwordless logins [e.g. public key
*** Info: authentication] via sshd).

*** Info: If you want to enable that functionality, it's required to create
*** Info: a new account with special privileges (unless a similar account
*** Info: already exists). This account is then used to run these special
*** Info: servers.

*** Info: Note that creating a new user requires that the current account
*** Info: have Administrator privileges itself.

*** Info: The following privileged accounts were found: 'cyg_server' .

*** Info: This script plans to use 'cyg_server'.
*** Info: 'cyg_server' will only be used by registered services.
*** Query: Do you want to use a different name? (yes/no) no
*** Query: Please enter the password for user 'cyg_server':
*** Query: Please enter the password for user 'cyg_server':