I have exactly the same problem ...
I can log in and enter the password - then go to change password in admin panel.
The password is changed but I receive no message and the new password won't
work at all. However, the old password still works fine.

If I use the "forgot pasword option" this too appears to work since I receive the
new password from the system via email, yet it won't work for logging in.

The posted sql solution won't work for me either. Ours is the lastest version of vshare,
purchased in September 2008. Maybe that's the problem? I'm convinced however
that the symptoms that I'm experiencing have to do with file permissions !!!

I noticed problems with update images like logos, watermarks, and user pics too, but
as soon as the CHMOD settings on those files were changed to 777, they all worked
fine. It appears to me that the pasword function is doing the same thing ... it WANTS
to work and does everything that it should, but ultimately the login itself wasn't
affected due to a permissions issue ???

It would be nice to get a REAL USABLE answer to this! That would help many people,
especially ones who don't even know how to administer Mysql commands in PHPmyAdmin.
(or if those commands change slightly due to changes in vshare, sql, or php updates)
.
.