Its not going to fix the bad data so the error will occur until you fix the bad data. Copy an encrypted password from another row into the bad rows so they can be decrypted then you can optionally update the passwords from the manage user page. The password is not involved in open id authentication but it must be present. Ther error happens because its trying to decrypt a password that is not encrypted. The bug was that when a user registered with open id or windows live the random password we generated was not being encrypted or hashed according to the site password format rules. This bug is fixed so it will not happen any more for new users who register via open id or windows live.
Hope it helps,
Joe