Are you using the stock version of Linux that comes with the Eee? If so, it's specially mangled to be a single-user operating system. If you want full multi-user login, you have to take a number of steps - see here
for a guide that I admit I never tried.
I spent some time working on the original version, trying to get it working as I wanted it. In the end, I decided it would be easier to install a different distro. My Eee is now running Debian Lenny quite happily.
You should still be able too use F9 reset to restore the system partition to factory settings, but that would, of course, wipe any changes you have made. You could also, of course, try booting from a live distro on a memory stick (Asus supply a utility to make a stick bootable) and make some changes to try to get the system to boot.
P.S. - by the way, the default user is called user