My server error log tells me it's not able to create a certain temp file.

I am pretty sure Apache told you a little bit more specific which temp file couldn't be created. And from such an error, I would look at the directory the temp file is trying to be created in. I'd say that directory doesn't include writing permissions for your Apache user.

I'm not concerned with any security problems, because there are already security measures that will prevent any unwanted parties from reaching that point in the program.

Ermmm, ok, if you say so ;)

I guess what I could do is use my own authentication module so I don't have to use htpasswd.exe...

Yes, you could do that, but AFAIK, htpasswd doesn't do anything awefully difficult. It opens a file, adds a line with `username:password`, in which the password is "encrypted". IIRC, it's just a MD5'ed password, so you can easilly do this yourself from within perl. See for example Digest::MD5.

HTH