Step #1: Master connecting with PuTTY from your PC. The trick is installing the Windows drivers, and knowing that PuTTY has a bug where you have to set your COM and baud rate, then momentarily switch to SSH and back to Serial. Otherwise, you get an "Invalid port number" error. Sounds ridiculous, I know. But I video'd it here http://shankserver.org/2010/09/logging-into-sheevaplug/
You have to be able to get to that point where you can see the Marvell>> prompt, or forget it.
Step #2: Get a 512MB USB drive and ENSURE ITS STABILITY! You can do this by attempting to update Das U-Boot bootloader. If you can't get past this, everything else will be incredibly difficult. You would need a TFTP server, or to follow a VERY LONG online install. To save yourself the grief, just seek out an old, small USB drive. To test it's stable, follow these instructions to update the bootloader http://www.cyrius.com/debian/kirkwood/sheevaplug/uboot-upgrade.html
Step #3: If bricked, or the password is lost, unbrick your SheevaPlug. Use the ESIA tool to do so. Follow my instructions here http://shankserver.org/2010/09/unbrick-sheevaplug/
The big gotcha here is that it gets stuck at 8% at "Starting onboard controller". So even if it worked, it looks like it didn't. Just let about 5 minutes go by, then quit out of ESIA, and try to connect with PuTTY. You should be able to get into the box using the default root password, nosoup4u.