Database Connection Restriction Problems

I just installed postgres7 on my new axi and I am reading through the online

administrator's guide about authentication methods. I read this part of the
guide which seems to be exactly what I am looking to do:

To restrict the set of users that are allowed to connect to certain
databases,
list the set of users in a separate file (one user name per line) in the
same
directory that pg_hba.conf is in, and mention the (base) name of the file
after
the password or crypt keyword, respectively, in pg_hba.conf. If you do not
use
this feature, then any user that is known to the database system can connect
to
any database (as long as he passes password authentication, of course).

I believe I have followed these instructions by having this as my
pg_hba.conf
file:

local        netstat                                          crypt netstat
host         netstat     207.112.136.9    255.255.255.255     crypt netstat
host         netstat     207.112.136.12   255.255.255.255     crypt netstat
host         netstat     207.112.136.2    255.255.255.255     crypt netstat
host         netstat     207.112.136.100  255.255.255.255     crypt netstat

The file mention at the end of each line is in the same directory as
pg_hba.conf. This file contains three user names which are all valid
postgres
user names, and they are all on their own line. The users are pgsql,craig,
and
netstat. However, I can still connect to the netstat db as user sgshop. I
have
no permission to do anything in the existing tables but I can connect.  Am I
correct in believing that the user sgshop should not be able to connect to
the
netstat db under these circumstances? Has anyone here had success doing
something like this in postgres?

Craig Anderson
Director of Internet Services
Netstat Resources, LLC.