problem with the postgres db user

Hi Everybody,
Am running into a problem with the following scenario:
I am not able to login as the db postgres user, on

Ubuntu 10.04 (Lucid Lynx)
Postgres 9.0.4

Postgres was installed with rpm for ubuntu
The password for the postgres user was set after installation
I am able to su to the postgres user with that password
I am able to start psql as the os postgres user

But
If I am logged in as anyone else and try: pgsql -U postgres and use the password - I get the following error:
Psql: FATAL: Ident authentication failed for user "postgers"

I tried altering the password for the postgres user, with:

ALTER USER postgres WITH ENCRYPTED PASSWORD 'password'

It tells me that it is successful. But I am still not able to use the new password.

pg_hba.conf, has no restriction on the postgres user, if fact it has no restriction on anyone:
host all all 0.0.0.0/0 md5

What am I missing?
Thanks,
Kasia