When trying to restart my MySQL password I get the following output in the console (this is also the input that caused the output):
C:>"C:\MySQL\bin\mysqld" --console --init-file=C:\mysql--init.txt
111008 23:42:48 [Note] Plugin 'FEDERATED' is disabled.
111008 23:42:48 InnoDB: The InnoDB memory heap is disabled
111008 23:42:48 InnoDB: Mutexes and rw_locks use Windows interlocked functions
111008 23:42:48 InnoDB: Compressed tables use zlib 1.2.3
111008 23:42:48 InnoDB: Initializing buffer pool, size = 45.0M
111008 23:42:48 InnoDB: Completed initialization of buffer pool
InnoDB: Error: log file .\ib_logfile0 is of different size 0 5242880 bytes
InnoDB: than specified in the .cnf file 0 24117248 bytes!
111008 23:42:48 [ERROR] Plugin 'InnoDB' init function returned error.
111008 23:42:48 [ERROR] Plugin 'InnoDB' registration as a STORAGE ENGINE failed.
111008 23:42:48 [ERROR] Unknown/unsupported storage engine: INNODB
111008 23:42:48 [ERROR] Aborting
111008 23:42:48 [Note] C:\MySQL\bin\mysqld: Shutdown complete

initfile and saved it there? What happens when you executeC:\mysql\bin\mysqld --init-file=C:\\mysql-init.txt? (Note that your edit only copied step 6 in there, you still haven't told us what you've tried!) – slhck Oct 3 '11 at 19:44