Just trying to get a picture of your process:
You are dual booting windows (7? XP?)
You are using your original suse 12.1 cd to rescue grub .. .
You boot from the disk, it gives you a list of options; Install new system, Rescue existing system etc...
You choose "Rescue", it prompts you for a username and password -- you provide those associated with your:
user account? or root ?
And can't log in.
A couple of things stand out:
It may be that the username and password your cd expects are some kind of default password ie; "admin" + "password"
or "blank" + "blank" or something other than your actual credentials.
The windows boot loader (at least last I was dual booting) will not boot (or even detect) a linux system.
You must have Grub (or lilo) installed as the boot loader (something to do with the MBR?)
If you want to change the order that OS's are listed in GRUB
the easiest way to do this is by editing a file called menu.lst
I'd recommend reading up on menu.lst entries and setting up grub.
I'm unfamilliar with yast, I know it is the suse equivalent to synaptic on debian, perhaps a suse user can guide you there.
moving "windows" up to the top line in the order I want the boot menu to appear and leaving that alone and just selecting "windows" as default
By doing this you may be disabling grub, and setting the windows boot loader in its place.