pg_hba.conf and password/crypt authorization

Things work fine with the authorization type in pg_hba.conf set to "trust".
However, when I try to use either "crypt" or "password" psql fails to
authenticate either the postgresql super-user (mylocal in my case) or any
other non-privelegded user.  I am using  version 7.0 under RedHat Linux 6.1
and have read and tried to apply the techniques described in the 6 May 1999
issue (Vol 1, Number 308) of the pgsql-general-digest.  Any helpful hints
would be greatly appreciated.

Thanks.

--dana (jde@acm.org)