The documentation for this module isn't clear as to just what it accomplishes. I'm guessing, but if this is correct someone in the know should move this into the article itself:
httpauth changes the way usernames and passwords are prompted for in Gallery. Normally, the username and password are entered into text fields within a page; when httpauth is installed, whenever a visitor enters a location that requires authentication HTTP authentication is used, so that the user enters his username and password directly into his browser's username/password dialog.
You are correct, the HTTP Auth module does do this, however the primary purpose is to allow users to enter their username / password in non-HTML user agents, like blog readers or WebDAV clients.