authentication error - Mailing list pgsql-admin

Hi,

I try to connect using psql test from localhost.  I got:
FATAL 1:  No pg_hba.conf entry for host localhost, user postgres,
database test

I double checked that I have done the following:
I started server using: postmaster -i -D /var/lib/pgsql/data >logfile
2>&1 &

In my pg_hba.conf file I have:
host       all         127.0.0.1     255.255.255.0    trust
local   all     reject

Are there anything else I need to do ?  or anything I did wrong ?
I try to force the connection go through tcp/ip.
Please advice if you can.

thanks in advance,

Jie