This site was mentioned on the latest DotNetRocks and it is a good reminder that hashing a password is not enough.
This site basically created all the possible hashes for 8 letter passwords using [a-b][0-9], so you can send it a hash and it will return the password for you. It even possible to do this for larger hashes (they would need to create much larger tables), but if you throw in a strong salt this becomes practically impossible. (because a good salt is a set of random bytes, exponentially increasing the difficulty of using this sort of method to find the password)
This article contains a decent explanation of how to add a salt to your hashed password , I have been meaning to write something up on how to best do this... but I have not gotten around to it yet.