This error message is almost certainly caused by one of two things:
1. A strange plugin messing with WordPress's core wp_generate_password() function.
2. An Entropy build of PHP running on your webserver (probably an older Mac), as dravenloft mentioned.
To test for #1: Please disable all plugins and switch to the default theme (twentyeleven), then try connecting Jetpack again. If Jetpack connects successfully, you know one of your other plugins (or, less likely, your theme) is breaking something.
To test for #2: from your webserver's command line, run the following command.
/usr/local/php5/bin/php -r 'echo( 3000000000 );' && echo
If the output is 2147483647, you are using an Entropy build of PHP (or some similar buggy build of PHP). For the curious, the Entropy PHP bug is explained at http://core.trac.wordpress.org/ticket/19571
To work around the bug, please install the wp_rand() for Entropy PHP plugin. After that plugin is installed and activated, try connecting Jetpack again.