postgresql database password

Hello all,

I am new to postgres but have a pretty extensive background in Oracle. I
need a little help starting out with some basic concepts.

I have downloaded 8.1 on my linux box and have created a database called
test. I also have created a login role called test with password <test>.

I use this login from the linux command line. psql -h localhost -p 5432 -U
test -W

I read that the -W prompts for a password. I give the password test which I
set up when I created the user test and it let me in. The problem is I also
run the same command line login and didn't specify a password.

Am I missing something with authentication, perhaps a config file setting.

In Oracle, the heirarchy is server -> database -> schema(s). The database
itself would not have a password associated with it but each schema would to
be able to access their objects within the database with a password (or
not).

It appears that postgresql works a bit differently. I have looked in the
documentation for 8.1 but nothing seems to jump out at me.

Any help or pointers in the right direction would be awesome.

Regards,

ReedK