Well, you can generate the sha1 representation for a password and put that into the DB manually.
See this post for a nice explanation by David on how to put in the SHA1 for "apple"
Though that doesn't really "solve" your problem, it should allow you to get into the system.
We've had a couple of users with this kind of problem and so far, the only identifiable cause has been a problem with PHP's setup of sessions. (see this thread)
Can you tell me if you get a red error message popping up when you're trying to login? If not, then you have a problem with the way PHP's sessions are configured on the server. (see the above mentioned thread)
If you DO see the red error message, something else is going on. (unfortunately)
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