Mac OS X Lion and sshpass
You should first file a complaint with the server's administration, observing that public key authentication is vastly more secure than simply a password, but I'll assume you've already done so, and your admins are simply idiots.

Apple sadly removed ssh-askpass when they integrated its functionality into ssh, scp, and ssh-add.  There is however an SSHKeychain package that provides an ssh-askpass with an Apple-like Cocoa password prompt for macports' openssh package.  It should fix your problems the way you want, perhaps even setting the SSH_ASKPASS variable for you.

Just fyi, I'd usually recommend against installing the openssh macports package itself because it break your Apple password prompt, but once you've installed SSHKeychain macports usually offers a more recent openssh than Apple.

There is nothing wrong imho with embedding passwords in scripts when the server disables public key authentication, i.e. if they cared about security, they should reenable public keys.  There are even servers that intentionally break sshpass.  You could access such machines using the following expect script :

#!/usr/bin/expect -f
set timeout -1
set send_human {.05 0.1 1 .07 1.5}
eval spawn $argv
match_max 100000
expect {
   -re "USERNAME@(\[0-9A-Za-z_\\-\\.\]+)'s password: "
     { sleep 0.1 ; send -- "PASSWORD\r" ; sleep 0.3 }
}
interact


You may speed up this script by reducing the sleeps and send_human delays.