user auth & passwords

For the life of me I can not find any substancial documentation on how to give
users passwords.  I have found the -a argument to many of the command line
tools, but I can't seem to figure out what they do.  I have also played with
pg_hba.conf, but this exercise has proved to be just as frustrating. I also
tried to use "create user" via psql, but it too did little.

I am trying to setup a database that will only allow users with the correct
encrypted passwords to access the system.  It does not appear to me that the
`createuser' tool has the ability to set user passwords.  I tryed creating
users with different settings for -a <system> but this did not really do
anything differently.

When I changed the auth setting in pg_hba.conf from trust to crypt or
password, I was unable to login with user postgres.  I had to set
local back to trust to be able to do anything.

I would really apreciate it if someone who knows how to create passwords for
users would drop some knowledge.  The lack of documentation is driving me nuts.

--jason