Passwords module not authenticating users

Great module. I should finally be able to break free from vbulletin.

I have gone through this procedure a couple of times (with a clean drupal 5.9 install) and everything has come over as needed.

My only issue is with passwords. Maybe I do not fully understand the intended functionality. When attempting to log in with vb users, it says the username or password is incorrect. At that point you can enter your username or email and it will send you a one time login link. From there it will let you create a new password and log in.

I am just wondering if it is supposed to work as such, or if the password module is supposed to actually bring over the password.

If it is the previous, something is aloof. If it is the later, I guess I'll have to figure out a way to handhold a few thousand people through the process.

Thanks in advance.