HostBill connects directly to FreeRADIUS mysql database, so you need to make sure that
If you dont have freeRADIUS installed yet you can refer to this short guide: Installing FreeRadius
HostBill installation is fully automated and takes just seconds, more info at Installation
If you'd like to enable your clients with ability to change passwords go to Client Functions in your product config, and make sure "Change Password" function is enabled.