What was the password format before? If it was 'Encrypted', you'll have to make sure that you have the same MachineKey in your web.config as the web.config that was used when the passwords were saved. If you don't have it, you'll have to reset everybody's
password, either using the FBA Pack's Reset Password mechanism or Password Recovery web part, or using the technique you used above.
As for the people picker, did you adjust the PeoplePickerWildcards settings in the web.config? I never touch it and the people picker works for me.