On DevShed there's a new tutorial looking at user management in a PHP application including looks at data validation and encrypting passwords.

In this article we will look at how to create a secure user management module. No user authentication or user management script can ever be one hundred percent secure, but we can try to use the tools that are available to us to their maximum, and thereby make it difficult for malicious users to hack our scripts.

They include example scripts showing how to validate user input - length, alpha, empty or not and if its numeric or not. They look at encryption with the sha1() technique, comparing the user's input, hashed, to the key already stored.