How to Password Protect Your WordPress Site
5Rachel Cunliffe has a nice little write-up about how to password protect your WordPress site. I would add this to her list:
Check with your web host. Sometimes you can simply make a change on your control panel to password protect your site. My host 1and1, for example, provides this simple method in their FAQ section.
About the Author
Michael Pollock is the marketing and product development guy for Solostream. He's also an Internet business coach who teaches bloggers, coaches, consultants and other creative entrepreneurs how to use the Internet to earn more money and live an amazing life. Visit Michael's Internet Business Coaching site.

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I am using “Registered Users Only 1.0.3″ this is also great plugin for making your blog private and password protected.
I will check out the information listed. I was looking for a solution to password protect my blog.
Good tips! I heard that WP blog are being hacked. So it would be great to know how to protect our WP. Thanks
That probably works well, but it’s $147!
I know that some folks want to create a WordPress Site which is membership only and if that’s what you’re after then I can recommend the following solution.
Note that this will only work if you sell your WordPress membership site access through ClickBank or PayPal specifically, but you can then use Easy-Download Protector at http://www.Easy-Download.com to provide automated access for someone who has just paid to read your blog.
It even let’s you know whether more than one person is sharing the same account through IP Address Alert and you can suspend or delete the shares account.
Automated login and password setup, password reminders, etc. Plus Easy-Download Protector is professionally installed for you, so you don’t need to worry about the techie stuff.
It’s a neat way for writers to protect their membership only blog.