I have changed this:
<!-- Loginserver information. Defaults shown -->
<loginserver>
<host>127.0.0.1</host>
<port>5999</port>
<account>root</account>
<password>****</password>
</loginserver>
to this:
<!-- Loginserver information. Defaults shown -->
<loginserver>
<host>127.0.0.1</host>
<port>5999</port>
<account></account>
<password></password>
</loginserver>
I took out a account and password that shouldn't have been there.
I can now log onto my server, but there are no NPCs around.