from the MS KB as it has always worked for others.
http://support.microsoft.com/default.aspx?scid=kb;en-us;Q307545

If your recovery console is not accepting the Admin Password are you sure you are using the correct passwordv\ (it wants the password for the default ADMINISTRATOR account, not just any old admin account)? If you are sure, here is how to get around the problem:
http://support.microsoft.com/?kbid=308402

Essentially it requires the Q308402 hotfix.

If you happen to be using encrypted file system you definitely DO NOT want to use any of the available utilities to change the admin password.

This registry edit causes the Recovery Console not to ask for a password, and works for both XP Home and XP Professional. I would recommend making it if yours is a home system where an unauthorized user getting access to the computer is not a great problem.

1. Start Regedit
2. Navigate to HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\WindowsNT\CurrentVersion\Setup\RecoveryConsole
Set the DWORD SecurityLevel value to 1
3. Exit Registry and Reboot

This might also be of benefit since many are unaware that XP has built in password recovery IF you plan ahead.
http://www.tipmonkies.com/2005/08/16/windows-xp-password-recovery-made-easy/