Hi Steve,
Yes, I doubt it is possible to change an inputType of the fly.
Maybe something like this.
Example
<%@ Page Language="C#" %>
<%@ Register Assembly="Ext.Net" Namespace="Ext.Net" TagPrefix="ext" %>
<!DOCTYPE html>
<html>
<head runat="server">
<title>Ext.NET v2 Example</title>
</head>
<body>
<form runat="server">
<ext:ResourceManager runat="server" />
<ext:Container
runat="server"
Height="22"
Width="150"
Layout="CardLayout">
<Items>
<ext:TextField runat="server" EmptyText="Password" SubmitValue="false">
<Listeners>
<Focus Handler="this.up('container').layout.setActiveItem(1);" />
</Listeners>
</ext:TextField>
<ext:TextField runat="server" InputType="Password">
<Listeners>
<Activate Handler="this.focus();" />
<Blur Handler="if (this.getValue() === '') {
this.up('container').layout.setActiveItem(0);
}" />
</Listeners>
</ext:TextField>
</Items>
</ext:Container>
</form>
</body>
</html>