Authentication on NT won't work

I'm just trying to make a directory have password authentication on winnt.

I've created .htaccess and put it in the directory that I want protected. Here it is:
AuthType Basic
AuthName "By Invitation Only"
AuthUserFile /usr/local/apache/passwd/password
require valid-user

I've also created a password file with htpasswd.

Now when I go to this page it does give me the login/pass prompt.
But when I enter the correct user/pass it just gives me a Error 500 Internal Server Error.

I know the user/pass is right and has been encrypted properly.

I've gotten this thing working just great in unix but can't get it going in nt.

I've made sure that I've specified the proper directives in httpd.conf (like AllowOverride and AccessFileName).

What is missing here? I've noticed something also, The internal server error says to contact admin "blah" but I changed "blah" to something else previously.

So that suggests to me that it's not even using the httpd.conf file that I've edited? Any ideas?