My dad had this issue on his machine. For some reason, it just started asking him to change his password and gave him a deadline to do so. He was puzzled because he had never entered a password to his account. The deadline came and he was totally locked out. He kept putting in the password he uses most often, and it would not let him in. I think it's probably because XP was confused when he didn't enter an initial password.

My XP machine asked me for the same information even though I had not entered a password. All I did was hit ok without entering a new one and it told me that my new password was stored. You can bypass it this way. Just dont enter a password if you didn't previously have one.