Auth v1 is the first API used in OpenStack it was used by the fine folks at Rackspace for their cloud until the auth v2.0 (and v3.0) was developed and deployed with keystone for OpenStack services.
There is still quite a few Swift tools using the auth v1 API and not ported to auth v2 and does not seems to be updated in the near future.
We have a made a simple extension that expose the v1 style auth to keystone.
You would need a recent version keystone (as of trunk from the 14th of June 2013) and just follow the readme from this repository :
which should get you going and have tools like cyberduck connecting to your keystone+swift.
Feel free to report a bug on github if you need more informations.