generic username and password prompt

ahhhh the joys of the web. i just setup a WordPress blog on my website. i have it setup to allow people to register and become contributors. but i have run into the following issue:

i can pull my blog up just fine, but when attempting to access the wp-register.php page, a pop up window appears prompting me for my username and password (as if my directory on the account has no read permissions). once i put my FTP username and password in it will then take me to the “wp-register.php” page were registration can resume.

all the permissions are set correctly on my web hosting account. i have tried this in IE, Firefox and on a Mac using Safari. I have also used 3 different computers, none of which have any firewall settings (i know someone will ask).

Anybody else running into these issues or have a way to fix?