First off it has nothing to do with your WiFi password be it WEP or WPA. Once your iPhone is connected to your network then you are fine.
Secondly are you sure thats the IP from what it says on the iPhone, also are you sure your SSH is turned on? Lastly the password you entered in your screenshot is "Alpine" when its actually "alpine" if you have not changed it and you are on the newer 1.1.2 FW.
Lastly if you are 100% sure you have have SSH turned on and IP is correct, maybe your password is wrong, test it say by SSH'ing into your phone, if you fail there, then your password is clearly wrong, you will need to get to the master.passwd file and open it and reset the password via HASH values. There are steps to do this on a few of the howto websites.