postgreSQL - problem with connection

Hello,

I installed postgreSQL 7.3.2 on RedHat 8.0 successfully, and reated a
database and a user. I also added these lines
in the pg_hba.conf file.

local mydb myuser password host mydb myuser 127.0.0.1
255.255.255.255 password host mydb myuser 0.0.0.0
0.0.0.0 password

When i tried to get connected to my application with this setting, i got
the following error

java.sql.SQLException: FATAL: Password authentication failed for user
"myuser"

I observed that, unlike the lower versions of postgreSQL, the db user's
password is stored in encrypted form (i think md5) in the pg_shadow table.
Is this the reason for the problem ?
I also gave 'md5' instead of 'password', but didn't work (only 'trust' works
!!!)

please let me know the solutions to the above problems at the earliest,
thanks in advance,

regards
ramesh