I was wondering is there is a way to give someone permissions to manage users i.e adding users, resetting passwords etc without giving them admin rights?
There is no way to do that elegantly at the moment.
However, you might be able to use locations in web.config to (un)restrict specific roles. In that case, you would restrict admin mode (leave the standard configuration with WebAdmins, Administrators there), then create a new ex. UserManagers role and assign your users to it and unrestrict the specific URL-s, such as path_to_admin/SearchUsers.aspx and path_to_admin/EditUser.aspx.
You will have to test this first, I haven't given it a try.
What provider do you use?
Thanks Marija. That sound like an option.
Henrik, we are using SQLMembershipProvider at the moment.
If you are in the planning phase of the project I strongly recommend looking into using Federated Security. Would solve this problem and many others out of the box.