Not sure why there is a login prompt if its just plain text. Also, wouldn\'t it be easier to use an input statement and have that passed into the os.system() function? For instance:
def prompt():
while 1:
command=raw_input(\"C:|> \")
if command == \"exit\": break
os.system(command)

prompt()
prompt()

for user input you can make the case sensitivity go away by using the str.lower() function
i.e. userInput = str.lower(raw_input("$" + userLogin + "$" + "../"))
if userInput == "help"
good code none the less.