Nocase is a simple module that allows for case insensitive Drupal passwords.
N.B. This module currently stores (and assumes that all stored) passwords in lower case in the database. In other words, it modifies user input (which is not really a good thing) and might require existing users not using all lower-case passwords to reset them. Furthermore, once this module has been installed, uninstalling it is not a recommended course of action as users using mixed-case passwords will not be able to log in unless they type the same password in lower-case.
Patches are welcome :)