Iphone keeps saying password incorrect for itunes

but it's the correct password since I can log into the itunes store from itunes

I used to have a 2nd Generation 32GB iPod Touch which I ditched Friday when I finally got an iPhone. I purchased a Black 32GB iPhone 3G S and activated it in store. I attempted to log into iTunes on it and was met with a message saying my password was incorrect. I logged in on my computer when I got home and the password worked fine. I think my issue is due to a very old iTunes account (5 years old). It was created from an AIM Screen Name which was an option at the time. It does not have an email address in the username and in iTunes I must select that my screen name is an AOL account. I don't have this option on my iPhone. Could this be my issue and if so, how do I fix it?

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