http://support.microsoft.com/default.aspx?scid=kb;en-us;308402
'The Password Is Not Valid' Error Message Appears When You Log On to
Recovery Console in Windows XP
or
Start | Run | Regedit
Navigate to
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\WindowsNT\
CurrentVersion\Setup\RecoveryConsole
Set the DWORD SecurityLevel value to 1
Exit Registry and Reboot
Note you can save the registry key first by:
On the File menu, click Export.
In the File name box, type SaveKey, and then click Save.
Or create a system restore point prior to editing.
Note: If the registry key is not there, you can simply create one by going
edit > new.
http://support.microsoft.com/default.aspx?scid=kb;EN-US;322756
HOW TO: Back Up, Edit, and Restore the Registry in Windows XP
Disclaimer: Modifying the registry can cause serious problems that may
require you to reinstall your operating system. Use the information provided
at your own risk.