md5 with psqlODBC 07.02.0001?

As far as I know, md5 authentication was introduced with version
07.01.0009. Yet when I try to use the current ODBC driver 07.02.0001
with Access 97, any combination except plain passwords in pg_shadow and
password authentication fails with 'Password authentication failed for
user "foo"'. I can use encrypted passwords and md5 as authentication
method if I connect with psql, so the server seems to be working.

The beta driver just gives a Reserved Error (-7711).

Is this the way it is supposed to work? And if not, what have I done wrong?

Yours, Florian Hars

PS: While experimenting, I seemed to notice that Access converts all
passwords to lowercase. Is this correct? And if so, shouldn't it be
mentioned somewhere in the documentation?