On PHPMaster.com there's a new tutorial that wants to help you keep your application and users a bit safer - a guide to password hashing for PHP applications.
You must always think about security. If passwords are stored in plain text, what happens if an attacker gains access to your database? He can easily read all of the users’ passwords. That’s why we use a technique called password hashing to prevent attackers from getting user passwords. In this article you’ll learn how to store the passwords securely in the database so that, even if your database falls into wrong hands, no damage will be done.
He starts off describing what password hashing is and why it's important (and better than it's plain-text alternative). He gives some examples of using some of the built-in hashing functions PHP has to offer to generate the hashes. He starts with md5/sha1 (note, these are not recommended) but moves into more effective options like sha256, salted hashing and even bcrypting passwords with crypt.
Be sure to check out the comments for other security concerns and links to suggested tools and resources.