I actually just set up my watch user for you, p, saw your post title and wondered if you were looking for me. I have the same sort of trouble.
My workaround for this (and also constraining discussions search on my posts) is to not refer to the drop down list. Instead, I click the wee blue "Select People" link next to the field. In the Username Lookup thingy that comes up, I type b noir into the Username field, and then click Lookup. That'll bring me up.
I agree it's not easy. Took me quite a while to work out the procedure.
Ah, I am clueless, I didn't realize that select people was a clickable option.
I am finding the new system very strange and not very convenient.
I particularly hate the spell checker, my in browser spell checker is much better at providing relevant suggestions and works as I type. Shame it doesn't work in the editor.
It does work in the html editor, but who wants to use that for general editing.