Hey, everyone. I've been searching and wrestling with this for a while, so I thought I'd post what I found out.
If you need to see if a user entered the proper wordpress password OUTSIDE of the actual wordpress folder/application, you need to do an include and then use a few of wordpress' internal functions to see if the user/password combo results in a valid wp user object. Here's a rough draft of what I came up with...
<?require('blog/wp-blog-header.php'); //must appear before any page content?>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML>
<HEAD>
<TITLE> New Document </TITLE>
</HEAD>
<BODY>
<?
$theUserObj=wp_authenticate("submittedPassword", $submittedUser);
if(!empty($theUserObj->user_login) && !empty($theUserObj->user_pass))echo "Correct";
else echo "Incorrect";
?>
</BODY>
</HTML>