How does Hale confuse Tituba? What is the significance of their conversation?
I think Tituba feels somewhat confused by Mr. Hale's treatment of her because he is so kind. When she is first questioned by Hale, and she denies bewitching the children, Mr. Parris -- also a reverend, and her master -- orders her to confess or he will "take [her] out and whip [her] to her death [...]." Then Mr. Putnam shouts, "This woman must be hanged! She must be taken and hanged!" As a slave, this is the kind of treatment to which Tituba is accustomed.
She is used to being threatened and belittled, even by a minister, so the fact that Hale is a minister doesn't lead to her expect to be treated gently. Hale treats her in so gentle a fashion that it shocks her. As Hale questions her, the stage directions tell us that "He takes her hand. She is surprised." He touches her, treating her like a human being instead of an animal or possession. She kisses his hand in gratitude, and he tells her, "we will bless you, Tituba." She is "deeply relieved." He goes on to explain to her that she is special, that she has been "chosen to help [them] cleanse [their] village." Now, not only has he treated her kindly and saved her from the whipping and hanging promised by the other men, but he has made her feel as though God has given her a special purpose.
She wants to give Hale what he wants, and what Hale wants is numbers and names. How many came with the Devil, and who were they? She seems to see an opportunity to scare her master, help herself, and please Hale. Tituba insists that the Devil bid her to kill Parris (as I'm sure she was very tempted to do many times), an idea that may make him think twice before he strikes her again, and she says that the Devil had "white people" working for him and that he used this as a means to convince her to join with him, exonerating her from some blame. She says that Sarah Good and Sarah Osburn came with the Devil, and this sparks a frenzy in the girls. Abigail picks up the thread of accusations, and it leads to nine other accusations by the end of Act 1.
It is this conversation between Hale and Tituba that ignites Salem. Her confession and accusation of Good and Osburn make possible everything else that happens in the play.