Screaming Penguin - Source Does Matter

You're Probably Storing Passwords Incorrectly

I have actually had this "debate" before. Just don't do it, store a hash. And, as the article notes, it's a great idea to salt the hash. One commenter notes that you can salt the hash with a function on the username, rather than just a system wide static salt. Also, another commenter notes that it's easy to pick out the sites that do this wrong (and there are many), they are the ones that will send you your password in email if you forget it.