ssh login FreeBSD

I was under the impression that in FBSD to use passworded login's you needed to edit the sshd_config to enable PasswordAuthentication varable? Once I have done that and tried to login I still have the same problem.

I can't seem to figure out how to get around this...

every change you make to sshd config remember to restart sshd /etc/rc.d/sshd restart

Also keyboard interactive login will still work for passwords.