If you had looked at table schema of asp.net membership system they store the hash of raw password along with salt used to produce it. see the schema below,
I wouldn't use MD5 SHA1 is much safer. But to be honest, if you know anything about security and cryptography, these are one way functions. So mostely no one will lose so much of his time attacking something that won't give him some money :D. If you think that you aren't safe with this use RSA, but use very-verya-very long number as key.