There might be several reasons why eBay credentials do not work:

1) The credential for "Live eBay" site instead of "Sandbox eBay" is used.

2) The credential for developer.ebay.com is used instead of a Sandbox account.

To detect whether Sandbox account login is used or not, mind that all Sandbox account logins start with "TESTUSER_".

Normally, the sandbox account can be created using the Sandbox Registration Tool, when you are logged in to developer.ebay.com.
(Direct URL - http://developer.ebay.com/DevZone/sandboxuser.asp)