I recieved the following help from nicholas on another forum that fixed the
problem:
Windows XP will encrypt and change the length of a password
for security purposes (so someone cannot determine the number
of characters if a hack is attempted).
If your password is incorrect, turn-off AutoComplete, reboot,
then turn-on AutoComplete, then re-enter your password.
Adjusting AutoComplete Settings:
To modify your settings for the AutoComplete feature or clear all items from
the list of form or password suggestions, follow these steps in Internet
Explorer:
1. On the Tools menu, click Internet Options.
2. Click the Content tab.
3. Click AutoComplete.
4. Click the appropriate AutoComplete check boxes, or click Clear Forms
or Clear Passwords to clear all saved items from the appropriate
AutoComplete history.
Click OK, and then click OK.
Outlook Express keeps prompting for your password - Fix
http://www.dougknox.com/xp/tips/xp_oe_passwords.htm
This fix also applies to Outlook, other programs that store passwords
in the Protected Storage System Provider sub-branch of the Registry.
It also corrects some issues with Internet Explorer and AutoComplete.
[Courtesy of Doug Knox, MS-MVP]