myibidder software running on win7 did not bid the last time. I looked at the ebay password it used and it seemed to be more characters than it should be. Using the setting option, I tried to change the password to the correct password and after I clicked Apply > OK and checked, the longer password is still there. How can I change the password that myibidder uses?

Myibidder does not show password in the settings. What you see is a series of stars only (your password does not contain starts only, right?).
The length does not matter since this is encrypted so it has no relations with the length of your original password.

You just need to login using your current password so the app will sync it automatically.