I know there are ways to get your root access back and change your password, but every time I try a new flavor of Ubuntu (installing using Wubi) my username/password is ignored.

When I try to use Recovery Mode to change the password, the keyboard input appears to be blank.

This doesn't happen when running Ubuntu directly from a partition of its own.

Currently running Wubi from a Win7 SP1 AMD 4400+ machine.

So, you choose jim as your username, but install from your Windows Administrator account. This means your home directory will be /home/jim and your username jim and your Terminal prompt jim@ubuntu, but on the account login you will be prompted with Administrator. You can change this if you like by going to User Accounts Settings.
The reason for this weird behaviour is that the designer expected you would install under the account Jim and then automatically defaulted the username to jim. However, the designer didn't code for the case where the account was Bob and you installed as jim.
Note: when you enter a password in the terminal, it automatically suppresses output for security purposes. It doesn't show any response (e.g. not even *'s). You just have to type it and hit Enter. Read this question for more info: Nothing shows up in the terminal when I type my password.