Thanks so much for your help Jason!
The problem was my server's set-up required changing the trigger that was being used by the login behavior from the default which is "Current Page Submit".
Ok - in English - that meant in Dreamweaver in the Security Assist's trigger (which was step one of the Authenticate User wizard where I changed it to SA1 encryption) I had to choose something OTHER than current page submit for it to work with my server's set-up. I chose to authenticate on the Login button being pressed. (This is from the drop down for those of you who have Security Assist.) securityassist/ (open the Solution Recipes accordion.)
I got there by following the Security Assist tutorial videos on how to add encryption. You double click on the Authenticate User server behaviors to change that. But on the upside my store is now working with Password Encryption!
Does anyone know if the PowerStore 4 has built in encrypted passwords?