What kind of algorithm does .htpasswd uses?
It's CRYPT encryption - an old default. You should probably use MD5 or SHA instead - see man htpasswd for more information.
How are you trying to generate your passwords? You could run htpasswd -n -b username password, but most languages probably have a library function for that already.
Perl example:
perl -e 'print crypt("passwordgoeshere","salt") . "\n"'
The second parameter is the salt. As Gerard points out it's better to use a random string as salt.