pg_pwd and pg_shadow

Hi,
When I 'CREATE USER testuser WITH PASSWORD 'mypassword';
I see an entry in PG_PWD with the password 'mypassword' in plaintext.

In my pg_hba.conf I have all hosts using 'password' authentication with no
file argument.  Is there any way to keep postgres from saving the passwords
in PG_PWD?  I thought that passwords were to be saved in PG_SHADOW.  What is
PG_SHADOW for anyway?

If you have an answer, can you please send it to me via email?

Thanks.

--tony