Hello:
I have an odd problem with htaccess. It takes two passes at the logon to
gain access to the directory - same user name and password for each.
This might sound weird, but what client are you using?
Are there any redirections or does the page includes something from another directory?
I have seen this happening when the client does not resend the password information.
On another note, it generally is not a good idea to keep the password file in a web accessible location.
--Saurabh