I saw another forum about a guy with a similar problem but I didn't quite understand what the answer was. Is there a way I can fix this problem? Is it because the username and password were incorrect? The accounts for using forums and online mode on ssf2 are both the same correct?

From my understanding, the Connection Timeout message occurs when there's a connection error between you and your opponent and/or when you're trying to log in and can be easily resolved by restarting the game.

And no, the accounts you use for the forums and Online mode are different and aren't related whatsoever.

that is probably the problem then (the accounts), the problem is when I am trying to login to online mode

This could happen if:

1. The Online Mode server is down (which we notice promptly and have back up within minutes - try again later!)
2. Your version of the game is downloaded and out of date and/or modded and/or from a website other than McLeodGaming.com
3. Your connection does not support Peer to Peer connections through the RTMFP protocol (ex. satellite internet, some 4G connections, college dorms, libraries, some hotels)