MySQL 4.1.10a anomaly

I dont know if this is an anomaly, still I cannot connect to MySQL 4.1.10a server using "localhost" as a host, whether in Java or in PHP.

Checking the log, the connection succeded, but the username/password pair was rejected. And no, the username does not have any host associated with it(eg. different password from different connecting host).

However, it was all solved just by using the IP address as the host. The problem was magically gone...

Should I post this as a bug then?