If you mean your application user password it would be much easier (and probably good enough) to just hash and salt the user password.
There are a few reasons:
- Hashing password is common practice/standard.
- Password should not be recoverable from database (even with access to database it's hard to recover the password).
- Database is not a calculator -- it's storing engine (advanced engine, but for storing data, not calculating them).
In SQL Server 2005 there is a function HashBytes is available. Don't forget to salt password before hash.
Exemplary code using HashBytes
could look like this:
DECLARE
@password nvarchar(100),
@salt AS nvarchar(100)
SET @salt = 'various random characters i.e. #_$a1b'
SET @password = 'my password'
SELECT HashBytes('SHA1', @salt + @password)
However, probably, it's much easier to make hash directly in application and only save hashed password to database.