I had a working email account in modest on N900 with IMAP (still works) and SMTP with TLS on port 587. I had to change my password on both IMAP and SMTP. I could successfully change it for IMAP, but for SMTP it is greyed out and I cannot edit it's field.
How can I change it?
Or can I edit it in a configuration file, if the field in the UI cannot be made accessible?

On my N900 both password fields are not greyed out. I am also using IMAP.

Perhaps check the settings after a reboot?

That said, the password for SMTP is stored in gconf, at /apps/modest/server_accounts/<account_name>ID1_transport. You can try to change it there using gconftool-2 -s ... no idea if it will really 'stick'

If all else fails, would you consider removing the account and adding it back?

I also checked - as I remembered something similar (but it seems iti was only the server field) - and all my accounts have password fields enabled.
You may go the gconf way if you know what to do.
Nevertheless removing/re-adding may be easier and as you use imap nothing will get lost.