Password setting having somewhat bizarre results.

I'm migrating some moderately sized DBs from Access to Postgres because I
can't deal with Access' performance issues and ANSI SQL noncompliance.

I hit a snag at a rather unexpected place. Before we get started I should
state that I'm using PGAdmin 1.16.1 on a Windows 8 64 bit machine. I'm
aware that this last bit shows appalling judgment. The server is on the
same machine and is running PostGres 9.2, whichever flavor was stable circa
1/31/13 according to the installation date.

Now I need to make this into a secured web server using my own machine as
the server. This entailed making some nice little logins for the purpose of
providing that access. I used the PGAdmin UI and set the passwords for the
new logins via the role creation UI. I was fairly sure that I had set them
to a nice high quality password, let's pretend it was
"CorrectHorseBatteryStaple". I tried using the logins via psqlODBC to
shepherd the data from Access via SQLExpress and got a password failure.
Needing to keep things moving, I switched to the postgres default login for
the data transfer. Thinking that I must have just got the password wrong I
tried correcting it through the UI. So then I tried setting the master
password through the UI. Ooops. I was able to regain access by setting the
pg_hba.conf to trust all connections, but even when I used the ALTER ROLE
SQL statement, I still could not reset the password.

I think I must be missing something fundamental, and I suspect it has to do
with MD5 encryption, but I'm at a loss as to what.

Any idea how to set up security properly for someone who openly admits to
being more analyst than DBA?