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Macbook startup problem

Up until a couple of days ago this Macbook (running Snow Leopard) was starting up absolutely fine and has been trouble free for almost 5 years. Now when turning it on it goes as far as a blue screen background with a login box which already shows the username. Entering the password has no effect other than the login box disappearing momemtarily and then returning and asking for the password again. This continues no matter how many times the correct password is entered.

We have tried starting in Safe Mode and it does exactly the same thing. The blue screen and login box appear as before and entering the password simply results in being asked for it again.

I should point out here that normally we are not asked for a password at all. The login box has only started appearing since the problem occurred. To ensure that the correct password is being entered we have booted from the CD and reset the password but this has no effect.

Addionally while booting from the CD I have carried out a disk repair but this has changed nothing. Can anyone help please?
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OK. No responses as yet but I have done some digging and discovered that this could well be down to a Launch Services problem which is causing a login loop. The common method of dealing with this appears to be deleting the cache files in the Macintosh HD > Library > Caches folder.

I am happy to try this but would welcome a step by step explanation of how to access this folder when booting from the install CD.
If you have a second Mac available, your best bet is to use Firewire Target Disk Mode:

This allows you to connect the two Macs using a firewire cable and the faulty Mac will appear as an external drive on the desktop of the good Mac.

Another thing you can try is booting while holding down the option key to make sure you are in fact trying to boot from the internal hard drive.
No second Mac unfortunately but I am able to boot using the install disk. What I would really like to know is how to access and delete the "" files from the Macintosh HD > Library > Caches folder while booted up using the install disk.
Would it be safe to use "rm /Library/caches/*" in single user mode?
Don't see why not.
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In this case my own solution is the correct one for this particular problem and I would hope that it will be of use to others.