Or less riskily;
Insert your grey disc 1, or the Snow Leopard retail disc if you upgraded from the original OS.
Restart and hold down the C key at the chime. Hold the key until the spinning gear icon appears.
When the Mac finally boots from the disc, 'OK' the language screen, then wait a few seconds for the menu bar to load at the top of the screen - DO NOT click on 'continue'.
In the menu bar you can select password reset; I think it's in the Utilities menu, but if not just try the others.
When you've done with just quit the install er and reboot to the internal drive.
Should be sorted.