Since you did not make the request, if you take no action on the request, your password will not be changed.
I actually encountered this a few months ago with my own account. I contacted LiveID support and was informed that they could not tell me who made the request, but confirmed that not approving it and ignoring the annoying message was the right way to go.
The most likely cause is that someone was trying to access their account, but typed it wrong, and got your signin. So, they asked for a password reset. Example - name@hotmail.com is yours, and someone else has name1@hotmail.com, but forget that "1" when trying to signin.
-steve