Cannot connect using psql

Hello,

I am having difficuilties connected to the postgres server. I asked
on IRC, but everyone was stumped, so here we go.

My pg_hba.conf file:

# TYPE DATABASE USER CIDR-ADDRESS METHOD

# "local" is for Unix domain socket connections only
local all all trust

# IPv4 local connections:
host all all 127.0.0.1/32 trust

# IPv6 local connections:
host all all ::1/128 trust
host all all 10.0.0.0/16 trust

I have postgres users called postgres, nick and osm and unix users
called nick and postgres. I created users nick and osm using the
createuser script.

I can connect to postgres and nick without any problems, but if I try
to connect to osm, the following happens:

nick(at)pmdev $ psql -U osm -W -d template1
Password for user osm:
psql: FATAL: Ident authentication failed for user "osm"

But ident is not included in the config file, which made me think that
the file wasnt being read. So ammended the entry for local to

local all all password

restarted, and was prompted for a password.

I am really confused as to the issue. I thought that postgres treated
unix users and postgres users seperately. It seems strange that I can
connect using user nick (the name of a unix user and a postgres user).

Thanks in advance,

Nick