I’m assuming you’ve a UI for a system administrator and you’re asking about how to display and edit a column of passwords in a table displaying user account characteristics. For the sake of the security of system users you should never store passwords in plaintext, especially if users can set their own passwords. Password plaintext should not be available to anyone -not even your administrators. It doesn’t matter if your data doesn’t need to be that secure. Users will re-use passwords so storing them as plaintext is just begging a hacker (maybe one of your administrators) to steal the users’ identities on other sites. This is a UX issue: contributing to someone hijacking your user’s Facebook site is giving your user a bad experience.
Instead of storing passwords, store a salted one-way hash of the passwords. Given you only have hashes, you cannot edit the passwords. You can only reset them. There’s no point in wasting screen real estate showing the hashes since they’re meaningless. Instead, provide a Password Reset button that on activation changes into a text box or opens a dialog box for entering the new password. It isn't technically edit-in-place, but then it isn't technically editing either. It can be an exception to the other fields.
If your administrators generally work in a secure area (the system owner’s office surrounded by other administrators), there’s no need to mask it. Anyone can probably guess a manually reset password is some weak variation of "password" anyway.
If, on the other hand, you are storing passwords in plaintext, go ahead and show them unmasked all time like any other text field. It’s pretty clear you’ve a system that doesn’t take security seriously, so why pretend? Or at most make the masked password convert automatically to plaintext when the field has focus.
As for the Create button, grids should ideally be shown within their own scrolling pane so that key controls, whether they are on the bottom, top, or side, always remain in view without scrolling.