They can see it, search it, read it, start new topics, etc. Does this mean if they can see it then they can moderate it even if I haven't made them "Forum Moderators"? I would like everyone to see the forums and only certain members be able to moderate them.
As far as passwords vs. permissions, since I have 100's of users in each private forum, and people coming and going all the time, it would be more difficult for me to change permissions so frequently instead of having the passwords, no? I have over 100,000 members. For smaller forums your point is well made.