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This is the where the list of passwords are located in a file called .htpasswd_x where x is
a number which relates to the secure area (which is the record id of the secure area).

You do not have to create these .htpasswd files as the system will create them automatically.

Normally this folder should be located outside the root of your web site but if this is not 
possible then it should be protected with an .htaccess file.  The .htaccess file located in this 
folder may be used for this.