Authentication issues with mysql + eap +md5

[NorthPole]

Hello everyone.

i'm trying to get started with freeradius using mysql for storing the
users and md5-eap type authentication
but something is wrong with my configuration and I cant seem to be able to login

radiusd -X  produces the following: http://pastebin.com/jpNtX4Hb
I try to connect to it issuing the following to the radtest :radtest
user 1111 localhost 1812 testing123
and all I get is

Sending Access-Request of id 247 to 127.0.0.1 port 1812
	User-Name = "user"
	User-Password = "1111"
	NAS-IP-Address = 127.0.1.1
	NAS-Port = 1812
rad_recv: Access-Reject packet from host 127.0.0.1 port 1812, id=247, length=20

can you please provide any tips as to where I should look for errors?
Thank you