Bren,
I had somewhat a similar problem when I was trying to change the login
password. It kept coming up and saying the new password was typed
incorrectly, so I figured it didn't take. The next time I logged on my pc,
it would not accept the old password, and I didn't bother remembering the new
one because it said it was incorrect. I had to call Dell, and we ended up
doing an unnecessary reloading of Windows, but it really just took doing a
system restore from an earlier date. You might try restoring the system from
an earlier date and see if that works. It did for me.. I hope this helps...