"When I enable authorization (=1) I see even less than I did before. My authorization settings completely prevent me from viewing everything. I get that 'not authorized' error on every single page I view"
Since you report that you are "not authorized", let's work on that then ok?
use_authentication=0 of course should be =1
Since tsteele is setup in the cgi.cfg to be able to do everything, login as him. When you login, do you get an error that you can't login, like bad password, etc. Assuming you have logged in, and apache doesn't complain, then that should mean that yo have done htpasswd -c /usr/local/nagios/etc/htpasswd.users correctly, and there is a tsteele in the .users file.
Now that you have shown yourself that you can successfully login, there should be nothing that you can't view or execute. please paste the exact error you get, instead of "not authorized" if you don't find your problem by then. From what others have stated, they had problems by using some other application to secure there website, such as selinux. If that is the case, then it has nothing to do with nagios, and it's this other app, that is causing you grief.
Since you report that you are using Redhat, then fixing selinux was how they fixed there problem, and just might be yours also. do a search for selinux in this forum, and you might find the exact solution.