So you want to encrypt your password for safe storage. now how do we do this? Use crypt()
The way this works is like so
User fills out HTML form
<form action="process.php" METHOD="POST">
<input type="password" name="reg_password">
the variable $reg_password is then sent to process.php to, yup process the info..
In the process.php script you will have something like this.
$reg_password = crypt("$reg_password", "$1$salthere^");
This will encrypt your variable $reg_password into an MD5 hashing. Just use the same salt to encrypt thier password when they login everytime and you are set.