.htaccess problem


I’m trying to set up .htaccess from the main account panel. I entered a username & passwords & the directory that I want to protect, but it doesn’t seem to be working.
What I want to do-(maybe I’m mis-understanding totally), is when some one clicks on my domain, they go to the index.html page. From there, they click on a button to enter. (the link is http://mydomain.org/protecteddirectory/index.html).
I thought that the password screen would popup then, but it never does.
What am I doing wrong??