Dave, I use a 6 character password and I use the same pw for several PalTalk identities, so I know that uniqueness of passwords is not a criterion. In doing a search on DaveO to see if you were already in the PalTalk roster, I found nobody who'd match. There is a person with the nickname 'daveo' and, unless PalTalk is case-sensitive on nicknames, I doubt that yours would be accepted without modification.
I'm with Jon it not being sure what your Powerbar is. If it's the icons at the lower right of the screen (by the time), I also call that the tray. OTOH, Microsoft Office used to put what they called a Powerbar on the screen, with shortcuts to all the Office programs. I believe they may have prestarted the programs on bootup, so when you clicked on a Powerbar icon, the program would appear to open instantly. Problem with that was it could mess you up royally with other programs.
You might try clicking on Start/Programs and then highlighting Startup. If you have a lot of programs in your startup group, you might want to make note of them, then delete them and reboot. This should give you a cleaner boot which might allow you to install PalTalk properly. Also, have you removed the PalTalk references in the registry as Jon referred to in one of the PalTalk threads?