Go find the .PWL files in C:\Windows, delete them to allow it to accept a new password the next time.
I have a Dell Opiplex GX240, 256MB ram, 1.7Ghz, running Win98SE. I decided to set up a system password to keep it being used when I was away. In Setup, under Security, I unlocked Password Status and entered and confirmed my password. On rebooting, it asked for my password with a blinking cursor to type it in - BUT no matter what keys I hit, no letters appear on the screen; it's impossible to type in anything. After 8 or 9 reboots, I gave up. Can anyone tell me why the keyboard let me type in the setup, but won't let me type to enter it. (Probly have to reset the jumper.)