</lurk>
His Python code is not terribly pleasant:
1/ there's absolutely no need for an object, much less repeated recursive object creation
2/ The spacing is bizarre (though that might be the fault of your pasting)
3/ (minor nit) self.Outer should be self.outer
4/ His code is slooooow
5/ I consider myself a reasonable Python programmer ;-) but trying to follow that gives me a headache
6/ As others have noted it's rather inflexible Here's a shorter simpler faster more-flexible version plus a test to demonstrate that his version is more than 5** times slower under Py2.5!!:

def make_combos(curr, *rest):
    if rest:
        rest = make_combos(*rest)
    else:
        rest = [""]
    for y in rest:
        for x in curr:
            yield y + x

def password_generator(seeds=DEFAULT_CHAR_SET, minlen=1, maxlen=8):
    chars = [seeds]*minlen
    for i in range(minlen, maxlen+1):
        for elem in make_combos(*chars):
            yield elem
        chars.append(seeds)

# insert the code for PasswordGenerator here

def test_combos():
    for pwd in password_generator():
        yield pwd

def test_generator():
    for elem in PasswordGenerator():
        yield elem

if __name__ == "__main__":
    for test_type in [test_combos, test_generator]:
        for i in range(3):
            test = test_type().next
            start = time.time()
            for j in range(1000000):
                test()   # change to "print test()" if you want output
            print time.time() - start,
        print
[download]

[**To be fair, his version is slightly faster for smaller numbers and gets worse the larger the number of passwords required...]<lurk>

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