md5 auth

Hi,

I've just downloaded 7.2.1 and I'm trying to use MD5 authentication. If I
understand clearly,

1) pg_hba.conf should contain 2 rows with

local all md5
host all 127.0.0.1 255.255.255.255 md5

2) I should restart my postmaster with "kill -HUP _pidno_", OK, I did it,

3) I should login now with an MD5 password:

$ psql -u template1
User name: postgres
Password: *******************************

Here I entered the MD5 hashed password. I got

psql: FATAL 1: Password authentication failed for user "postgres"

However, if I enter the "clear text", unhashed password, I can enter the
database.

What did I do wrong? TIA, Zoltan
                        Kov\'acs, Zolt\'an                        kovacsz@pc10.radnoti-szeged.sulinet.hu
       http://www.math.u-szeged.hu/~kovzol                        ftp://pc10.radnoti-szeged.sulinet.hu/home/kovacsz