[eluser]cahva[/eluser]
Damn.. The earlier problem I had with example app with the login. I did a test on localserver at work this morning and got the same result as before(could login only with username when password field was not there). I have also Wamp server at work. Ok, so I thought to test it with one online webserver. I did the whole thing all over again(installed CI, DMZ and the example app from scratch) and voila, it worked as it should.
Then I tested with the same exact directory on my local server and it worked too! So its atleast not a problem with WAMP, there must be some minor change that I had made but I havent figured it out yet. Damn this is getting on my nerves