Reset Password "No Users Available"

I work at the IT Help Desk at the University of Montana and I've had two people come in with new Macbooks that have forgotten their passwords. I ran through the normal routine of starting up with a Mac OS X disc and reset their password. Everything up until there works fine but when we restart the computer it brings up the log-in window and the account or password doesn't work. I have restarted the computers with the Mac OS X disc again and tried to reset the password and it says "No Users Available" and I open up the terminal and type "ls" and nothing shows up. Any ideas?