CMOS is the battery-backed memory that stores configuration settings. Those settings determine how the BIOS operates, and the BIOS is the non-writable (except if you specifically run a flash program) chip that contains the instructions for how the system starts. In other words, the BIOS has the entire book of instructions, the CMOS stores the references to which pages should be read. A BIOS can work with fifty types of hard drives, the CMOS tells it which one it should be looking for, et cetera.
The BIOS change jumper on some boards prevents the BIOS chip from being overwritten. The BIOS may be overwritten by a flash program in order to update it, or rarely by certain viruses/worms. Most systems now have the flash-prevention setting in the CMOS settings rather than a jumper, if they have the setting at all.
The CMOS battery maintains the volatile memory settings. If the battery runs low or is removed, the settings are lost. The same happens if the jumper on most mainboards for clearing the CMOS is set. If the settings are always going to the default, and changes don't get saved, then any of those things may be happening. The fact that the password is still present indicates that the settings are not being lost though, since the password is also stored in CMOS and on most boards is not a separate function (some HP machines I've seen have a switch on the board to wipe the password but not the CMOS).
Resetting the CMOS using the jumper may be able to resolve the problem with the settings not being changed. I've never seen any setting or jumper that prevents CMOS settings from being changed and saved, since that's the function of password protection.