I have exactly the same problem. According to the logs, it is bouncing between “GET /wp-admin/ HTTP/1.0” and “GET /wp-login.php?redirect_to=%2Fwp-admin%2F HTTP/1.0”. After 20 tries Firefox give the “Redirection limit” error. IE does the same sort of thing but doesn’t produce that error, it only sits there looking.
I’m running my own server so if there is something wrong, maybe I just missed something. I have Gentoo with Apache 2.0.50 and PHP 4.3.6, installed WP 1.2