I am trying to do an XP home repair and when I try and enter recovery console it asks me for a password. I do not know the password. If I just hit enter it takes me to c:\windows and hangs there. I have tried going into control panel, admin tools, but there is no Local Security Policy so I can enable the no password on entering recovery console. Any help out there?

The password that is needed to access the recovery console is the administrator one.
If you can boot the system normally, and by the sounds of it you can, just reset the password to something you can remember.
I have to ask what you are try to fix as the recovery console may NOT be your best route ?
A repair install maybe a better course of action.
Here's the official Micro$oft way of doing a repair install,
And Here's one with screen shots.

I apologize, I am trying to do a repair install.

Best option then is to check the links I supplied.