I'm running Ubuntu 12.04.3 LTS on a Dell Inspiron 1200. Most of the time when I power up the regular login-screen appears. Sometimes a minimalist white text on a black screen appears. The screen requests my user ID. When I have typed it in and pressed "enter" it requests my password. When I attempt to type it in the flashing cursor does not move and no dots appear. When I press "enter" I am notified that the login is incorrect. All I can do is hold the power button down and start over. Generally, the second attempt works. My hard drive is the original. Is it time for a new one or do I have a motherboard issue? Or has the software become corrupted?
What I believe has happened is there is a singular missing file that supports the visual aspect of logging in. Your password not being accepted may have been a mistype, but there is certainly nothing wrong physically with your computer, otherwise it wouldn't even boot. Try installing a different display manager (like GDM) once you get logged in.
On a side note, the password issue of no moving cursor is normal. Those both happen on purpose in the terminal prompt and are for added security.