May be some confused with the direct modification of template template/customer/form/login.phtml not taking any effect in front end.
Its because of the Persistent Shopping Cart module from version 1.6
The persistent shopping cart module explains like below
“The persistent behaviour feature reduces consumer frustration when they try to access their shopping cart from multiple browser sessions. This feature also enables merchants to provide promotion, according to pre-defined segmentation rules, encouraging consumers to add items to the shopping cart and complete their purchase. “
So you can try to modify the below file…
You can disable this feature from below section in backend:
System -> Configuration -> Customers -> Persistent Shopping Cart -> General Options -> Enable Persistence = No
If the above doesn’t work then you can directly disable the module by editing the file: app/etc/modules/Mage_Persistent.xml