VBScript is like a cut down version of visual basic and has the advantage of like dos batch file, you can simply open a text editor like notepad, add your script and instead of .bat, save the file as .vbs.
Then to run the program, from the command prompt (Start->Run->cmd) simply type: cscript name.vbs
You do no need internet however it would be handy for tutorials to learn from
It doesnt matter how old your computer is as long as you have at least windows 95 (I think thats the minimum)
As of your example above, in vbs you do not need to declare your variable (although it is best practise to always declare them
)
The above in vbs would look somthing like
DO
Pass=""
pass = InputBox("Please enter your password")
Loop Until Pass="wood" or pass="name"