I have many Joomla sites in different versions on my server and it would be very painful to patch now all sites and the main point it worked before.
I tried the latest patch on the Joomla 1.0.13 but I still had problems even with different settings.
However I played around now with the session.save_path and the last time I even removed totally the value (also no path at all) and I got this error that session is not writable.
Then I added again the value '/tmp' and I got then a incorrect username or password but on my unpatched Joomla1.5 I could surprisingly log in

I guess my problem was that the cPanel easy apache build script didn't saved the php.ini properly. Maybe wrong charset or the session values had some additional characters that were not visible. So should you have cPanel and your webhost just upgraded and your site worked before, then ask your webhost to retype the session values again.
I'm sooo happy
