entries in pg_shadow

Hi.

The entries entered in pg_shadow haven't ever worked for me. I've tried a
number of times without success. If I update a user in there and set a
password for them:
postgres=> select * from pg_shadow;
usename  |usesysid|usecreatedb|usetrace|usesuper|usecatupd|passwd|valuntil                    
---------+--------+-----------+--------+--------+---------+-------+----------------------------
postgres |     100|t          |t       |t       |t        |       |Sat Jan31 01:00:00 2037 EST
user1    |    1001|f          |t       |f       |t        |       |                            
equipment|    1004|f          |t       |f       |t        | MYPASS|                            
(3 rows)

This example assumes I've set my password to 'MYPASS'.
Now I change pg_hba.conf to have a:
host         equipment   123.123.123.123  255.255.0.0     password 

Assuming my IP is 123.123.123.123 and the database I need to connect to is
called equipment and the user is of course equipment...

I've restarted the server and...

Now I run off to my remote machine and try to connect...

psql -u -h test.mypostgresserverdomain.com equipment
Username: equipment
Password: 

Connection to database 'equipment' failed.
Password authentication failed for user 'equipment'

Any ideas on what the heck I might be forgetting to do or not doing
properly?

I'm starting postgres up as: su -l postgres -c 'exec /usr/local/pgsql/bin/postmaster
-D/dr/raid0/postgres/pgdata -d 1 -i -o "-E -F -S 16384 -o
/usr/local/pgsql/home/logfile" -s >> /usr/local/pgsql/home/errlog 2>&1
/usr/local/pgsql/home/errlog1 &' 

In the server's errlog file I find:
Password authentication failed for user 'equipment'

It would be really nice if I'd see something like:
Sat Aug 28 21:43:39 EDT 1999 - Password authentication failed from
123.123.123.123 on database 'equipment'

-Michael