It could be a very good possiblity that your user profile is corrupt. This would only cause you to have the login problem and not the other problems like using Validity to login to websites. Because from there its all about the Simplepass and the Validity software.
Follow this to fix a corrupted user profile and see if that doesn't fix the problem. Your password list can be corrupted and I think this would resolve that issue.
http://windows.microsoft.com/en-us/windows7/fix-a-corrupted-user-profile
Try this and setup the fingerprint sensor again for that user. I'm almost thinking that before you do this, you should just uninstall Simplepass and Validity Sensor Software before creating the new profile.
I know its kind of a pain to go through this but it might just resolve your issue. It would make sense that its a good possiblity the user profile is corrupt because of doing a system restore and trying to troubleshoot this issue.
Let me know what happens.