OT: What is fusebulk filesystem? ntpass fails to reset windows password :(

[Antonio Olivares]

Dear all,
A Lenovo Laptop running Windows Vista locked out the teacher who was issued the computer
at school.  The teacher forgot the password.  I have successfully used the SystemRescue
CD http://www.sysresccd.org/Main_Page  with the utitlity ntpass many times.  This time, it
failed.  I also tried the cd from http://home.eunet.no/~pnordahl/ntpasswd/ which is the
same.  The laptop locked the teacher out and he could not login.  I told them it was a
snap and boy was I wrong.  The cd locates the users and apparently all looks good and when
we reboot we try with a blank password and we cannot log on.  Trying other livecd's
also gets us nowhere.  There apparently is some garbage on the C:\Windows\system\system32
directory that prevents the ntpasswd from doing its job.  When viewing the filesystem
which should be NTFS, the programs accessing the drive report that the fs is fusebulk.  I
have not heard about fusebulk filesystem. 
There has to be some sort of encryption on the drive to prevent the password blank from
working.  
Does anyone have any other tools that can reset the password in such a case?
Is the only solution to reformat and reinstall?
All Comments/Suggestions welcome.  
TIA,
Antonio