When I use Basic Authentication over HTTPS the lock icon in Netscape browsers stays unlocked when the dialog pops up. Does this mean the username/password is being sent unencrypted?

No, the username/password is transmitted encrypted. The icon in Netscape browsers is not actually synchronized with the SSL/TLS layer. It only toggles to the locked state when the first part of the actual webpage data is transferred, which may confuse people. The Basic Authentication facility is part of the HTTP layer, which is above the SSL/TLS layer in HTTPS. Before any HTTP data communication takes place in HTTPS, the SSL/TLS layer has already completed its handshake phase, and switched to encrypted communication. So don't be confused by this icon.