So let me get this straight:
When you start up the computer in Safe Mode with Command Prompt, you get the logon screen.
When you enter a CORRECT user name and password, you get the Windows Desktop? That doesn't make sense.
If you boot from the Windows 7 DVD and try to get to the command prompt, you're asked for a user name and password. When you put in correct credentials, you get the normal desktop? That doesn't happen. Period.
Now...the reason your friend gets the command prompt and not a logon screen is because he/she has a blank admin password, and, as a result, does not get asked for credentials.