This is probably the 5th or 6th time I've backed up, reloaded, upgraded and installed wp2.
Finally it's working. Here's what I did.
Leave your 1.5.2 WP intact. Make sure that the 1.5 wordpress install is in the directory that you want WP2 to be installed to.
Backup your database just in case. In fact, back it up twice or three times just to make sure you always have a copy.
Make sure you are still logged into your 1.5.2 install. It will have the cookies and such still intact so there is no need to login again. Do not logout.
Move the 1.5.2 contents into a directory that you create. (Mine happened to be named /old/).
Upload WP2 to the / directory where 1.5.2 was installed. Now your directory structure should look like: /wp-content/, /wp-admin/, /wp-includes/, /old/
Navigate to [Wordpress install here]/wp-admin/upgrade.php
You might (probably will) recieve the error:
WordPress database error: [Table 'yourdbname.wp_usermeta' doesn't exist]
SELECT meta_key, meta_value FROM wp_usermeta WHERE user_id = '1'
Ignore it. Click upgrade.
You will probably still see that same error on the second page. Just ignore it. If you see no other errors then click continue to go to your site.
Now, you might possibly see a totally blank page. I did. Now, go to /wp-admin/. No need to login since you were already logged in. Hopefully this should stop the password issues you had.
Click on the presentation tab and since your old theme isn't compatible (at least mine wasnt) wordpress will default to the default theme.
Now go to your site homepage and everything should be fine.
I was having lots of trouble and this is what solved it all for me. (Note: This is exactly what I did, if it doesn't work for you, sorry, I can try to help but I can't promise that what I say will work).
Also, if you screw up your database and you didn't backup, it's not my fault.
If you still are having password issues, you can always manually change the password by hand in the database.
(This is in phpMyAdmin)
wpdatabase > wp_users
Click Browse and find the user 'admin'.
Click on the little 'Pen' icon.
Go down until you find the user: user_pass
Use this little tool:
To MD5 hash your new password and stick it in that field.
Save the changes and relogin to your wordpress with your new password.
Enjoy. Once again, if you screw up your database and you didn't backup, it's not my fault.
Edit: I realize the reason my theme wasn't compatible was because I forgot to move it to the new WP install.