Password Encryption

Hello,
I am sure by now you would all realise I am a total newbie <img src='https://asprunner.com/forums/file.php?topicimage=1&fieldname=question&id=2181&image=1&table=forumtopics' class='bbc_emoticon' alt=':D' />
I have a table called users and within this a field call password. I am using this for authentication, however, I have realised that when I create a new user's password or modify the password it simply sends the password to the table as it was typed.
How can I apply Password Encryption using password() from php?
Rgds,