mysql problem with new accounts

[Milambar]

My MySQL install seems to be borked.

Basically, for example, if I create a database called: thedb with
create database thedb;

Then run:
grant all privileges on thedb.* to user identified by 'password';

The db and the user is formed properly. the show grants for user shows they have all privileges on that db, but when I try and log in as that user with

mysql -u user -p

and give my password, and no, Im not mistyping it, Ive checked that, it still refuses access to the db.

ERROR 1045 (28000): Access denied for user 'user'@'localhost' (using password: YES)

The db works perfectly if I log in as root. (mysql -u root -p). All I can think of is that MySQL is not crypting the password correctly.

Can anyone offer any suggestions?

[hyper_ch]

you need to reload the user privileges by flushing mysql.

[warp99]

I have the same problem, but if I use this syntax:

mysql -u $USER --password=$PASSWORD

I can login just fine.