The NETWORK SERVICE account does not have a password. When you're configuring a service to run using this account, you can blank out the password fields, or enter anything and it will be ignored.
What you CAN'T do is leave the original placeholder dots. If you do, it'll keep telling you to enter a valid password.
In the past, in order to document necessary permissions for files and databases, I have had to test running the same service using the local SYSTEM account, the NETWORK SERVICE account, and a local or domain account.
To change to SYSTEM, you just select the radio button. But when it's time to switch back to NETWORK SERVICE, it's confusing. It is not obvious, what you should enter for a password.
If you explicitly blank out the password fields, you'll be good.