For whatever that follows thinking about using MD5 or SHA-1 on its
applications, please read this article:

http://www.matasano.com/log/958/enough-with-the-rainbow-tables-what-you-need-to-know-about-secure-password-schemes/

This article speaks too about bcrypt, designed to replace traditional
password hashing algorithms by the OpenBSD group. It manages salt
generation automatically and allows for user configurable levels of
algorithm complexity, allowing the algorithm to grow in complexity to
match growth in CPU speeds. Here's the python wrapper:

http://www.mindrot.org/projects/py-bcrypt/

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