Dovecot virtual domain problem

I am configuring a postfix/dovecot multiple virtual domain
instalation.

Postfix installation is complete and working.
Dovecot is giving me a big headache.
I'm using passwd-file for authentication. Each domain passwd file is
located on a directory by domain name.

Now here is the problem: I can't login to either pop or imap. It seems
my install is not recognizing the domain part of the login passed.

The logs says:
dovecot: Dec 04 06:01:30 Info: auth(default): client in: AUTH
1 PLAIN service=POP3 lip=74.52.87.130
rip=200.206.221.63
resp=AGJvdW5jZUBlZmx5ZXJzLmNvb2xtYWdhemluZS5jb20uY nIAYm91OTluY2UxMg==
dovecot: Dec 04 06:01:30 Info: auth(default): passwd-file(bounce,
200.206.221.63): no passwd file
dovecot: Dec 04 06:01:31 Info: auth(default): client out: FAIL
1 user=bounce
dovecot: Dec 04 06:01:33 Info: pop3-login: Aborted login:
user=<bounce>, method=PLAIN, rip=200.206.221.63, lip=74.52.87.130

It should be trying to read /etc/dovecot/<<some_domain_here>>/users.db
I have tryed both settings for passwd-file /etc/dovecot/%0.d/users.db
and /etc/dovecot/%d/users.db but no lucky. The files are there and
they are readable by everyone.

Here is my config:
Dovecot version 1.0.rc15 installed from CentOS yum

# /etc/dovecot.conf
IEffective uid=65534, gid=65534
ILoading modules from directory: /usr/lib/dovecot/imap
IModule loaded: /usr/lib/dovecot/imap/lib01_quota_plugin.so
IModule loaded: /usr/lib/dovecot/imap/lib02_imap_quota_plugin.so
log_path: /var/log/dovecot.log
info_log_path: /var/log/dovecot-info.log
protocols: imap pop3
listen(default): *:143
listen(imap): *:143
listen(pop3): *:110
ssl_disable: yes
login_dir: /var/run/dovecot/login
login_executable(default): /usr/libexec/dovecot/imap-login
login_executable(imap): /usr/libexec/dovecot/imap-login
login_executable(pop3): /usr/libexec/dovecot/pop3-login
mail_location: maildir:/home/domainMail/%d/%n
mail_debug: yes
mail_executable(default): /usr/libexec/dovecot/imap
mail_executable(imap): /usr/libexec/dovecot/imap
mail_executable(pop3): /usr/libexec/dovecot/pop3
mail_plugins(default): quota imap_quota
mail_plugins(imap): quota imap_quota
mail_plugins(pop3): quota
mail_plugin_dir(default): /usr/lib/dovecot/imap
mail_plugin_dir(imap): /usr/lib/dovecot/imap
mail_plugin_dir(pop3): /usr/lib/dovecot/pop3
auth default:
mechanisms: plain login digest-md5
username_format: %n
verbose: yes
debug: yes
debug_passwords: yes
passdb:
driver: passwd-file
args: /etc/dovecot/%0.d/users.db
userdb:
driver: static
args: uid=vmail gid=vmail home=/home/domainMail/%d/%n
socket:
type: listen
client:
path: /var/spool/postfix/private/auth
mode: 432
user: postfix
group: postfix
master:

Just if anyone else come along this problem too, the problem is with:
username_format: %n

I have set it to %n@%d and its all working 100% now. So it should
read:
username_format: %n@%d

Best luck you all!