Is there a way to allow our Exchange 2010 ActiveSync users to use a swipe or pattern lock? I tried creating the simplest policy possible and testing it on my Android phone, which is now insisting on a PIN or password and doesn't let me choose pattern.
Implementation of the policy as presented by the server is completely up to the device.
Android's interpretation of that policy seems to be that a pattern lock doesn't fit the policy's demand - your Exchange server really doesn't have any say in the matter.
Aside from rooting phones, your only recourse is probably to file a feature request against Android.