You can skip this section if you will not be setting up network passwords. If you are unsure, ask your system administrator for assistance.
Unless you are setting up an NIS password, you will notice that both MD5 and shadow are selected. Using both will make your system as secure as possible.
Enable MD5 Passwords - allows a long password to be used (up to 256 characters).
Use Shadow Passwords - provides a very secure method of retaining passwords for you.
Enable NIS - allows you to run a group of computers in the same Network Information Service domain with a common password and group file. There are two options here to choose from:
Note: To configure the NIS option, you must be connected to an NIS network. If you are unsure whether you are connected to an NIS network, please ask your system administrator.
NIS Domain - this option allows you to specify which domain or group of computers your system will belong to.
NIS Server - this option causes your computer to use a specific NIS server, rather than "broadcasting" a message to the local area network asking for any available server to host your system.