I am no expert on http authentication, I just learned enough to make it work for my purposes, but this is the .htaccess file that worked for me:
AuthUserFile "/path/to/my/apache/bin/.htpasswd"
AuthGroupFile /dev/null
AuthName "Private Home Web"
AuthType Basic
<Limit GET POST>
order deny,allow
deny from all
allow from 192.168.0
require valid user
satisfy any
satisfy all
</Limit>
When I leave it commented the way it is, I can access it from my network without being prompted for a password. If I comment out 'satisfy any' and uncomment 'satisfy all' I get prompted for a password on the network, and cannot access it at all from outside the network.
It is recommended you put the access information in your httpd.conf file, but if you are putting .htaccess directives in the web folders I would also check your Apache httpd.conf file for these lines and make sure Apache is looking for the same file name as you have it saved as:
#
AccessFileName: The name of the file to look for in each directory
for access control information.
#
AccessFileName .htaccess