authentication failing

I have Feisty 7.04. It was running fine last weekend. This weekend I went to test it again and it wouldn't allow any user to login.
The log in screen comes up fine then when I type my username and password the screen goes blank then the x comes on the screen then it returns to the log in screen.
I hit ctrl-alt-f1 and tried logging in. It keeps telling me incorrect password. I tried with the two users registered on the system. Only one was logged in at the same time.
I have no problems logging in directly on the server.

What should I do they solve this?

Thanks.
Krsnendu dasa