Adding encryption to passwords

Hi guys I have developed an intranet web interface with user access. I am storing the passwords into a mysql table as raw text (I know not so secure). So I am adding group access features and I am thinking to encrypt the passwords because this seems to grow as a project although it started as a simple web tool. So what do you think is the best way to use crypt, mcrypt, hash or perhaps md5 and what are really the differences because I am not sure if I get it right. -- Thodoris