What you're seeing is your SSH client asking for login name the first time; usually the ssh client negotiates the username with the ssh server (in this case the PowerConnect).  But the PowerConnect ignores the username that was supplied in negotiation, and asks for the username after the ssh connection goes up.  The first username doesn't really matter. Long story short, Dell has a cheezy ssh daemon; it may have been kludge'd onto a telnet daemon in order to add ssh support at the last minute.  
Here is the description:- HW: Powerconnect 5424 with the following version SW version    1.0.0.31 ( date  31-Oct-2007 time  10:32:13 )Boot version    1.0.0.6 ( date  09-Oct-2007 time  14:09:52 )HW version    00.00.02 Problem: when using SSH access to the switch, the credentials are asked for twice. Eg. when using putty, first the user gets prompted for "login as:". Just hitting enter would prompt for the "User Name:" This is causing problems writing a script for auto login.   SSH clients used: Teraterm and Putty Configuration:- Created username with password and privilege level 15. Generated rsa keys Started ssh server.   Options tried:- 1. Under line ssh, tried configuring "login authentication default". No change of behavior. 2. Under privileged mode, tried configuring "ip ssh pubkey-auth". No change of behavior.
SSH access problem on Powerconnect 5424