I'm not sure what could have been done wrong, but if you want to reset the password from the single user mode command line, follow these steps:
# mount -uw / # touch /var/db/.applesetupdone # launchctl load /System/Library/LaunchDaemons/com.apple.opendirectoryd.plist # dscl . passwd /Users/username thepassword # reboot
Where username is the shortname of the user and thepassword is the desired password.