ok found out how to reset the passwords as below
at SME splash screen on reboot press CTRL-X select the kernel you want to load, press the 'a' key to append and type a space followed by the word 'single'.
now execute that selection. at command prompt type 'passwd' and enter the new root password. I then rebooted my server. This worked in that it reset my root user but I still had to manually go in and change my admin password. Anyhow I can get in again at least.
Now I just need to work out why I cant add new users and when I try to delete them it wont delete but if I try readding the user that seems to delete them from the server manager. So much for being pre release - the beta worked far better than this one for my setup at least.