Ubuntu – SSH asks for password

I have already :

• Installed the server
• Generated the pub/pri keys with -P ""
• Copied the id_rsa.pub to authorized_keys
• ssh localhost > answered "yes", copied to known_hosts
• tried ssh localhost >> still asks for password

Output:

hduser@hduser1-desktop:~$ ssh -v localhost
OpenSSH_5.3p1 Debian-3ubuntu7, OpenSSL 0.9.8k 25 Mar 2009
debug1: Reading configuration data /etc/ssh/ssh_config
debug1: Applying options for *
debug1: Connecting to localhost [127.0.0.1] port 22.
debug1: Connection established.
debug1: identity file /home/hduser/.ssh/identity type -1
debug1: identity file /home/hduser/.ssh/id_rsa type 1
debug1: Checking blacklist file /usr/share/ssh/blacklist.RSA-2048
debug1: Checking blacklist file /etc/ssh/blacklist.RSA-2048
debug1: identity file /home/hduser/.ssh/id_dsa type -1
debug1: Remote protocol version 2.0, remote software version OpenSSH_5.3p1 Debian-
3ubuntu7
debug1: match: OpenSSH_5.3p1 Debian-3ubuntu7 pat OpenSSH*
debug1: Enabling compatibility mode for protocol 2.0
debug1: Local version string SSH-2.0-OpenSSH_5.3p1 Debian-3ubuntu7
debug1: SSH2_MSG_KEXINIT sent
debug1: SSH2_MSG_KEXINIT received
debug1: kex: server->client aes128-ctr hmac-md5 none
debug1: kex: client->server aes128-ctr hmac-md5 none
debug1: SSH2_MSG_KEX_DH_GEX_REQUEST(1024<1024<8192) sent
debug1: expecting SSH2_MSG_KEX_DH_GEX_GROUP
debug1: SSH2_MSG_KEX_DH_GEX_INIT sent
debug1: expecting SSH2_MSG_KEX_DH_GEX_REPLY
debug1: Host 'localhost' is known and matches the RSA host key.
debug1: Found key in /home/hduser/.ssh/known_hosts:3
debug1: ssh_rsa_verify: signature correct
debug1: SSH2_MSG_NEWKEYS sent
debug1: expecting SSH2_MSG_NEWKEYS
debug1: SSH2_MSG_NEWKEYS received
debug1: SSH2_MSG_SERVICE_REQUEST sent
debug1: SSH2_MSG_SERVICE_ACCEPT received
debug1: Authentications that can continue: publickey,password
debug1: Next authentication method: publickey
debug1: Offering public key: /home/hduser/.ssh/id_rsa
debug1: Authentications that can continue: publickey,password
debug1: Trying private key: /home/hduser/.ssh/identity
debug1: Trying private key: /home/hduser/.ssh/id_dsa
debug1: Next authentication method: password

Any suggestions?