I've been running FileVault with OS X 10.3 for a long time, and have been generally very impressed with its robustness-- even when I had some bad blocks on my drive. Recently I thought I should lengthen, and so strengthen, my account login password. So I went to the Accounts pane in System Preferences, inserted the cursor to the right of the seven bullets that represented my current password, added 10 more characters, repeated the operation in the Confirm Password field below, and my new password was accepted.
As you may know, those seven bullets show up in the Password field in this version of OS X -- no matter what the length of your password, or, indeed, even if that account doesn't even have a password. In fact, my original password, represented by those seven bullets, was actually nine characters. In any case, what happened next was that I could not log into my account with my now-changed password, and, hence, could not unlock the FileVault sparseimage containing my home directory.
I tried everything I could think of -- eg, the first seven characters of my old password plus the 10 characters I'd just added, just the old password, just the new 10-character addition, etc. (I was still able to access my computer through another account; just not my main account's home directory.)
I considered that maybe I'd forgotten what I'd added, but then I created a dummy account with a new password, and tried the same trick of adding characters after the bullets in the password field in the accounts pane. The new password was accepted. And the problem replicated itself -- I could then no longer log in, with either the new or old passwords, or any combination of the two that I could think of.
So if you're on 10.3, do not change your password by merely appending text to the bullets in the Accounts System Preferences panel -- you'll effectively lock out the account! (This isn't an issue in 10.4, as the bullets no longer show and you must type the existing password in full.)
Mac OS X Hints
http://hints.macworld.com/article.php?story=20060821202926308