The BIOS password is for accessing the computer itself, just like the Windows password at login. The BIOS password entry screen will appear before the computer POSTs. This is thought to be added security for the computer, but in fact it doesn't really help. If you simply remove the CMOS battery, the BIOS password will be reset and disabled.
Depending on the BIOS version you are running some have a enable/disable option that must be selected, and typically older type BIOS will only ask for the password and then it automatically assumes an enable on the option. So we know your BIOS is rather up to date. I would look around for the enable/disable option as TheBishop suggested. Let us know what you find.