Password issues

Hello, I bought my acer aspire one zg5 model netbook from a friend and needless to say did not come with a owners manuel so I'm at a total loss when it comes to the specifics with my netbook. Since I take my netbook EVERYWHERE with me I figured that it would be smart to put a password on it in case it were to get stolen no one would be able to access my personal information. But after I went into the bios and put the password in place the system said it had to restart in order to set the password, but upon restarting i get a little blue box that asks for the password and when i entered my password three times it said SYSTEM HALTED and then I went on-line to find out what happened and I learned that this particular version of netbooks by Acer has a glitch that if you put a password on it upon restarting the systyem erases the password you entered and replaces it with one that it generates itself. 1) Is this true? 2) how do i get my netbook to work again? PLEASE HELP ME!!!