I've set try_files to .html & .php locations as advised by Maxim and everything works fine except "index.html" - it's still pointing to Nginx error page instead of Joomla 404 error page. Is there a way to fix this?

Can someone explain to me what's the difference between "location = /index.php" and "location ~ \.php$" and why the fist one is trying to open/download files in the web browser.

I still can't get the web authentication to work with MD5 or SHA encryption. I think that I'm missing some module to support this.

Thanks for help so far.