happened to me after patching the latest xp patch.. still don't know what caused it..

the case is:
if logon with wrong password, it says something like "wrong password",
but if logon with the correct one, it will show "The system cannot log you on due to the following error, The parameter is incorrect. Please try again or consult your system administrator"

i think it is something to do with parameter passing within the windows logon module...

solution i did was repairing the windows.. it is working rite now..