Hello,
When I enter an invalid login/password an error message bar should appear on the screen.
It doesn't. I made a few check by reusing the default Joomla template and it appears.
So the problem is with the penguinmail template.
Please check it here and login with any dummy login/password.
http://ctoa2010.parkingb.be/index.php
PS: The login button shows no name (=another issue) and is on the right side of the search box.
Kind regards,