AuthName "Test Site"
<Limit GET POST>
try that as your .htaccess (change the Userfile path of course)
htpasswd -cd .htaccess [username]
htpasswd -c .htaccess [username]
or (for md5 digest)
htpasswd -cm .htaccess [username]
also make sure that both your .htaccess file and .htpasswd file are given full ownership to your web server account (e.g. chown www:www .ht*)
After trying this for a while I was able to get it to work, though, I don't see what I did other than restarting it serveral times. I also enabled mod_auth_digest, but I'm not using it...
Any one else want to take this on?