For anyone who is using phpFormGenerator that comes with the Fantastica script package, there seems to be a wierd security implementation that password protects the users entire website. This due to bad placement of the .htaccess file that is used for authentication. Although I don't have access to a Fantastica server, but that would be my guess. I would recommend anyone who is having such problems to directly download the program from the project's official website at sourceforge: http://phpformgen.sourceforge.net
This is without any predefined security implementation, so you won't have any problems.