I am a bit confused with SQLite at the moment, as this is the first time I\'m ever using a database. I got sqlite3 from here: https://github.com/developmentseed/node-sqlite3.
There are two distinct things to learn: sqlite the database program, and node-sqlite3 the nodejs module that provides access to the sqlite db services. Your database questions will be best answered by learning about sqlite, the database program first. I would recommend getting and installing sqlite from: http://www.sqlite.org/. The site has good documentation that will help you learn to store user names and passwords. You can create tables from the command line, add data and get as sense of what is going on. After that if you understand the concepts of node.js then node-sqlite3 will make much more sense to you. Otherwise, spend some time with the node.js site.
Maybe you can try node-sqlite from grumdrig. He has a very nice "example-driven" documentation.