I've noticed that the line is displayed when setting custom user passwords from /etc/init.d/overlay Initalizing passwords from /etc/chpasswd I guess this should be: Initalizing passwords from /etc/gnap/chpasswd Other than that the changing of passwords works very well :-)
The GNAP project has been discontinued, its removal was acknowledged by steev. If you need to, you can contact the Gentoo Embedded project; more information about the Gentoo Embedded project can be found on the following link: http://www.gentoo.org/proj/en/base/embedded/ This removal happens as part of project cleanup by the Gentoo Council's members.