Hi,
This happened to me when I am working both from the Eclipse development environment, and also from the web app. The 2 applications are using the same database tables, but different locations on the file system. I guess this causes some problems.
I changed the location of the repository in the file Repository/config/alfresco/repository.properties and changed the dir.root value to a folder on my hard disk. The web app should also use this folder. After this setting I don't get any "bad credentials" errors.
Hope this helps you,