OK I'm starting to get it. I originally had a password just like yours; very similar to yours. In fact it was identical to yours. This worked fine for many years and many OS X incarnations until the very first version of Lion, which installed without complaint.
The problem was, when I fist tried to log in with my perfectly good password, it didn't let me. This was bad. I quickly learned that I was going to need a password of length > 0, but how was I going to log in to provide one?
The solution was to boot Lion Recovery and select the Utilities menu. From there you will find a way to select your user account and provide a password. Try that.
Now, you said Lion let you erase your password. That is most likely a change from Lion's initial version and is news to me since it is something I have not tried since my initial Lion upgrade. However, if the Cisco installer or whatever that thing is expects a password of length > 0, there may be no way around it.
Edit to add: if you are trying to set up a Cisco router I am nearly certain the problem is with its setup software. If you are able to use your preferred password with everything Lion does then that's fine, continue to do so, but apparently Cisco simply can't fathom what you're doing. Cisco's consumer products stink IMO.
Message was edited by: John Galt
Ok, I found that my recovery partition was missing. I've been trying to install Windows via Bootcamp and failing repeatedly due to the fact that my internal optical drive is dead and external drives are totally impossible to use in this scenario (grrrr...). So somewhere in the long chain of patitioning and un-partitioning the drive, things just got messed up (for lack of a more technical way to say it).
I've decided to just revert back to my most recent backup. All is back to normal.
Cisco's software seems to be fine, btw. Although I would never try to use it to set up a router. I'm only trying to turn a usb printer into a network printer with my router.
Anyway, thanks for the help guys!