Fernhill Linux Project - Reset Password Using Recovery Mode

First shutdown your computer, then 'restart whilst holding shift' on the keyboard to load grub menu.

Select the second option 'recovery mode' from the grub menu.
passwd

12.04 update - the following option has been removed, so skip this step and select 'drop to root shell'
11.10 When you reach the recovery mode menu select the third option 'remount with read write permissions'
passwd

When the process completes press 'enter' and select 'drop to root shell' from the recovery menu.
passwd

12.04 update - you will need to use the following command before proceeding 'mount -o rw,remount /'
Now type 'passwd username' replacing username with your user name ie. 'passwd phil'
Now you will prompted to 'enter the new password' twice (you will not see what you are typing).
passwd

You should now see a message to say the password has been updated.

Type 'shutdown -r now' to restart the computer.