I am using XP and had the same problem, I could log in to Dashboard but couldnt login the Updater. Using Windows XP with a dynamic IP address at home. The Updater is installed, but wouldnt let me log in. It gave me this message when I try to log in: There was an error verifying username and password.
What worked for me was a Winsock refresh. Now updater works fine. I guess i had some corrupted files or settings. All is well now. Solved.
I tried Updater on another XP machine and it worked fine. So that made me suspect my machine was the culprit. Anyway the WinSock refresh did the trick. All is well now. I can login both ways. And I am using a password with one capital letter, a number and a special symbol. Works fine.
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