Authentication problems

I am a new postgres user who is having trouble
figuring out how user-based authentication is supposed
to work. I create a database, create a user and
attempt to use psql to connect to the new database
using the new user. However, the server always
responds with "psql: FATAL: IDENT authentication
failed for user "user". Are there additionaly
security of configuration tasks that need to be done?

Here are the commands I am executing as the user
postgres:

$ createdb database
CREATE DATABASE
$ createuser -P user
Enter password for new user:
Enter it again:
Shall the new user be allowed to create databases?
(y/n) n
Shall the new user be allowed to create more new
users? (y/n) n
CREATE USER
$ psql -W -d database -U user
Password:
psql: FATAL: IDENT authentication failed for user
"user"

I am running on Debian Sarge kernel versin 2.4.25-1.
All of my postgresql pkgs are 7.4.3-3.

Thanks,
listquestions.

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