To change the password, boot into recovery mode:
1. Select the second entry (recovery mode). Before pressing enter check it first by pressing 'E' because there is a wubi bug that may affect you. If you see the line "set gfxpayload=$linux_gfx_mode" you need to delete it, and then hit CTRL+X to boot.
2. This is supposed to boot to a read-only recovery menu. If it does you select option 3: to remount read/write. If it's a root prompt (#) then just continue to step 4.
3. Then select the root prompt (probably last option).
4. Check your username:
5. Enter a new password for your username:
However, this doesn't explain why you're booting to a terminal. Maybe you can first fsck the root.disk to see if there is an issue:
1. Boot windows and rename the 'old' broken root.disk to OLDroot.disk
2. Put your 'new' working root.disk back in place. (So both are in \ubuntu\disks directory
3. Boot the new ubuntu, drop to a terminal (Ctrl+Alt+T) and fsck the old one:
The command is case-sensitive so if you named it oldroot.disk change as appropriate.
sudo fsck /host/ubuntu/disks/OLDroot.disk
PS you might want to backup the root.disk before fsck'ing it, or at least copy your data off it.