BUG #3343: Passwords not working

The following bug has been logged online:

Bug reference: 3343
Logged by: Richard
Email address: richard(at)uniquelyrichard(dot)com
PostgreSQL version: 8.2.4-1
Operating system: Win2K SP6
Description: Passwords not working
Details:

New to PG. Using it on W2k test platform, for test of OpenBravo ERP.
Installed (for fourth time) using default settings. Computer is a
standalone, running in workgroup mode.
Install appeared to go well.
However,
1) When I install OpenBravo and provide password for Superuser account, I
get an error message that PG cannot validate. I go to pgAdminIII, and it all
looks good.
2) When I go to command line for PG, it allows me to create databases
WITHOUT password authentication. Why?
3) When I try to create a new user, it will not authenticate.
4) In the cases when it will NOT authenticate due to password, PG identifies
me as my OS log-on, not the Superuser or the Account Name from install.
OS Services shows PG (running as a service) is running. I've re-cycled it a
couple of times.

I just don't think you have this Windows thing down yet, but what do I
know.
I just need help!!!!
I am having no anomalous behaviors on the machine (2Gb mem, large SATA
drive, AMD 64 series cpu.