Modifying a password can be very frustrating when policies and requirements are very restrictive about the valid characters a password can have and when feedback is very poor and vague (looking at you unix/linux). A good example of inline validation is provided by the Georgia Tech PASSPORT website (Personal Account Self-Service Portal). 

First, the rules for choosing a password are clearly listed and the field where input is expected clearly highlighted:

And for the "pièce_de_résistance", as each character in a new password is entered, each of the rules being satisfied by the entered password are marked in green and the rules being violated are highlighted in red.

The same feature works for highlighting when the re-entered password matches the one entered first:

Once all conditions are satisfied, the "Change password" button is enabled (it starts disabled) and the procedure is completed.

I remember mentions of how inline validation may put a toll on performance and development time, but for a task that's frustrating to many (such as changing a password), getting it right the first time with feedback like this is very much worth the effort.