Background
You never ... really ... need to know the user's password. You just want to verify an incoming user knows the password for an account.
Hash It:
Store user passwords hashed (one-way encryption) -- via MD5, or strong hash like SHA1.
A search for "c# encrypt passwords" gives a load of examples.
See the online SHA1 hash creator for an idea of what a hash function produces.
Now, a hashed passwords means that you (and database thieves) shouldn't be able to reverse that hash back into the original password.
How to use it:
But, you say, how do I use this mashed up password stored in the database?
When the user logs in, they'll hand you the username and the password (in its original text)
You just use the same hash code to hash that typed-in password to get the MD5 or SHA1 (etc) version.
So, compare the two hashed passwords (database hash for username and the typed-in & hashed password). You can tell if "what they typed in" matched "what the original user entered for their password" by comparing their hashes.
Extra credit:
Question: If I had your database, then couldn't I just take a cracker like John the Ripper and start making hashes until I find matches to your stored, hashed passwords?
(since users pick short, dictionary words anyway ... it should be easy)
Answer: Yes ... yes they can.
So, you should 'salt' your passwords.
See http://en.wikipedia.org/wiki/Salt_(cryptography)
See "How to hash data with salt" C# example -->
http://www.obviex.com/samples/hash.aspx