you have htpasswd.users file in /usr/local/nagios/etc/ ?
if you don't,try this command :
htpasswd -c /usr/local/nagios/etc/htpasswd.users
and then enter new password for this user.
if it doen't help,habe a look at webserver error log with this command :
tail -f /var/log/httpd/error_log
check this file after you enter usrname & passwd for login to nagios.
if the error was about unabling to access the htpasswd file ,try to change the permission of this file by this command :
chmod 744 /usr/local/nagios/etc/htpasswd.users
i have the same problem but using above it is ok now.