Quick security question

[cragos at gmail.com]

Can someone more familiar than I with the math behind one-way hashes
explain how a hashed string is compared with a string in plaintext?  I
had a typo in the text I fed to passwd, and, when I went back in to
fix the typo, I got an error message that read: "BAD PASSWORD: is too
similar to the old one"

Of course, that was easy enough to override as root, but it raises an
interesting question.  Anyone game to explain the math behind how it
was able to tell?

Thanks,
Sean