[Exim] Need help with smtp/authentication / using passwd fil…

I have the following in my config file:
---------- clip -----------------
authenticate_users:
driver = plaintext
public_name = LOGIN
server_prompts = Username:: : Password::
server_condition = "${if crypteq
{${lookup{$1}lsearch{/etc/passwd}{$value}fail
}} {$2} {yes} {no}}"
server_set_id = $1
------------- end clip -----------------

All attempts fail with the following message:
    2003-09-15 14:07:02 authenticate_users authenticator failed for
terry.csstnlocal
.com (terry) [192.168.1.100]: 535 Incorrect authentication data
(set_id=terry.shows)

I can successfully do this using plain text files, so I know my condition is
right. All I changed was the "eq" to a "crypteq" and the password file to
"/etc/passwd". I would prefer not to keep two separate password files (one
for smtp, and another for pop3)

What did I miss?

Thank You

Terry Shows