Windows 7: Cannot Create New User Account

My account has the hidden admin account privilege on Win 7 Home Premium. I use it every day and never have a problem.

I tried to create a new user account - which appears to create successfully. However, on boot I get a red x with "the username and password are incorrect." Neither account has a password set up - it's like windows does not recognize the new account has been created.



However, I can bypass by clicking OK and log into to my account (hidden admin privilege). Once there I can switch user and manually enter new account name and it logs in successfully.

How can I get rid of the error message on boot up and have both accounts available for log in.



thanks!