I have problems with this too. It seems that digest authentication is missing. There are a few comments on the mailing list about adding it. see http://web.archiveorange.com/archive/v/yR2T4nBtThzJs27hqDLb but nothing is convincing.
Keep in mind that basic HTTP authentication is passed in the URL string as in your example, but the digest is encoded by md5 and passed as a separate element in the HTTP request.
also the library http://www.live555.com/ supports HTTP / digest authentication, I tested it, it works.
to test health use testProgs in live555
live/testProgs/openRTSP -4 -u admin admin -w 1280 -h 720 -f 20 rtsp://192.168.0.2/defaultPrimary?streamType=u > testmovie.mp4
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