Can you elaborate on the password issue you were having?
I had a password protection via htaccess on mydomain.com/testdir/
The wp install was in mydomain.com/testdir/wp/
But I am not sure yet if this was the problem.
Some specs here:
Website is on Apache server (linux), PHP 5.3/Mysql 5.
Error reporting is switched off, this also gave some problems because op depracated warnings.
Now running wp 2.9.2.
Still have to do some testing, because I have tested it on 2 other wp installs (2.9.2.) on the same server and no problems there. So it could also be a plug-in related problem.