Thanks for the link to the Apache CPAN link. I just attempted to "use" the module in my program, and it returns a 500 error.

I'm going take another look around to see if I can find something else.

I also attempted using a standard string as a salt, and the server doesn't recognize the password (but does acknowledge the generated .htaccess and the .htpasswd file).

If you aren't all ready, Use strict warnings and diagnostics or die.
Also look at CGI::Carp

Following tachyon's advice should give you more of a clue why you're getting an error, rather than just getting a "500 - Server error".

I did have an "|| &error; " appended to the use statement, but it still returned an error. I assume it's a fatal error (thus leading me to believe that the module is not present), however I will try some alternatives to see if I can pinpoint why I recieve that error.

No luck with the "manual" creation of .htpasswd files. I double checked to make sure that the .htaccess is pointing to the created file for "AuthUserFile". Perhaps permissions need to be set?