SSH: The Secure Shell (The Definitive Guide)
Barrett, Silverman, & Byrnes / O’Reilly

SSH Frequently Asked Questions

Password authentication doesn't work with OpenSSH.

The SSH server may be configured to use PAM for verifing passwords (e.g. in OpenSSH, this is the UsePAM option). If so, you must configure PAM on your system to know about SSH. The PAM configuration files are usually either /etc/pam.conf, or individual files under /etc/pam.d. If your OpenSSH is not using PAM, then another issue which can cause this problem is the password hash format. Many modern Unices use MD5 to hash their passwords instead of the traditional crypt function, but OpenSSH defaults to using crypt for its built-in (non-PAM) password verification. Recompile OpenSSH with configure --with-md5-passwords to fix this problem. Note that if PAM is in use, it is irrelevant whether you compiled SSH --with-md5-passwords. When using PAM, SSH does not examine the password file itself; rather, it calls PAM routines to do this on its behalf.