Hi David,
You didn't specify if you use the SOAP or REST API. The most recent REST API documentation is here and the SOAP API documentation is here.
If the response says you have the wrong user name/password you may have missed calling GetServerDefinition to get the correct URL to use (Clarizen has more than one data centers). Another thing to check in the federated authentication settings is that API access is enabled (though I think you would get a different error if it wasn't).
If you still can't get through with these tips, please attach a code snippet (omitting the actual user name/password) and we'll have a look.
Hope this helps,
Ophir