Backup Plans and Locking Database

[Matt]

I run SQL Server 2000 and use thier database maintenance plans to
backup my databases. My questions is what happens if a change is being
made to a database table while a backup is running? Should I be locking
the databases before the backup begins?

Scenario:

1) Database Plan begins backup at 7:00 PM.
2) At 7:01 PM a web user updates their password while the backup is
taking place.
3) at 7:15 PM the backup is complete.

In this scenario, will the change/update made in step (2) be contained
within the backup?
On Another note, can anyone point me in the right direction for "Best
Practices" on establishing a Recovery Mode for a database? I have been
told to set it to "Simple" so the logs do consume a lot of disc space
and performance. The issue with this is I am not sure if I should be
maintaining a full transaction log. Our database only changes on a
monthly basis. The only "on going" updates that may take place is a
user changing their password. We also have other databases that change
often throughout the day. I assume after a transaction log has been
truncated, the amount of disk space it consumes is minimal? So please
any information or a kick in the right direction would be much
appreciated. Thanks.