This is plain and simple: You're doing something wrong. This behavior is not some unique bug that you've discovered in Windows. You're either using the wrong user name, or you're setting a password and not realizing it.
Follow my instructions carefully:
STEP 1 -- ENTERING A USER NAME:
Enter the user name you want to use to log into the computer in the TOP BOX on this screen. Again, this is your user name. Do
not use "administrator."
STEP 2 -- SETTING A PASSWORD:
If you do not want a password,
do not enter anything at this screen. Just hit
next and go on to the next page.
Long story short
If Windows is telling you that you have an invalid password, it's because you set a password and you're giving the wrong one.