Hi Hugo 
I am sending you the complete entry in my httpd.conf file and the password file so that its easy for you to figure out the fault
HTTPD.CONF 
# GENERAL SETTINGS
#
ConnectionsTotal = 150
ConnectionsPerIP = 10
SystemLogfile = /usr/local/var/log/hiawatha/system.log
GarbageLogfile = /usr/local/var/log/hiawatha/garbage.log
# BINDING SETTINGS
# A binding is where a client can connect to.
#
Binding {
        Port = 80
#       Interface = 127.0.0.1
#       MaxKeepAlive = 30
#       TimeForRequest = 3,20
}
# GENERAL SETTINGS
#
ConnectionsTotal = 150
ConnectionsPerIP = 10
SystemLogfile = /usr/local/var/log/hiawatha/system.log
GarbageLogfile = /usr/local/var/log/hiawatha/garbage.log
CacheSize = 10
# BINDING SETTINGS
# A binding is where a client can connect to.
#
Binding {
        Port = 80
#       Interface = 127.0.0.1
#       MaxKeepAlive = 30
#       TimeForRequest = 3,20
}
CGIextension = cgi
VirtualHost{
        Hostname = 10.112.75.59
        WebsiteRoot = /usr/local/var/www/sample
        AccessLogfile = /usr/local/var/log/sample/access.log
        ErrorLogfile = /usr/local/var/log/sample/error.log
        StartFile = index1.html
        PasswordFile = basic:/usr/local/var/www/.passwords
        ExecuteCGI = yes
}
PASSWORD FILE
                                                    demo:HZMp0/8/GixBc   (USERNAME:DEMO PASSWORD:DEMO)
GENERATED BY FOLLOWING COMMAND:  htpasswd -c -d  /usr/local/var/www/.passwords demo
But when i enter username and password as demo it doesn't accept.
Please help !!!!!! 
