I found this thread which answered my question:
http://moodle.org/mod/forum/discuss.php?d=135707
edit the file moodle\admin\uploadusers.php (using a simple text editor)
search for $usersnew++ and then add the two lines shown here (the comment line and the set_user_preference link) so that the code now looks like the following: (with or without the line spacing I have shown)
$usersnew++;
// Hack to force password change for all new users in the upload csv file
set_user_preference('auth_forcepasswordchange', 1, $user->id);
if ($createpasswords and empty($user->password)) {
Now save the file and the test it