In a quick note from the PHP.net site, they have a warning for those running PHP 5.3.7 (the most recent release) - there's a bug that's serious enough (with crypt) to where upgrades should probably wait until 5.3.8.
Due to unfortunate issues with 5.3.7 (see bug#55439) users should wait with upgrading until 5.3.8 will be released (expected in few days).
The issue causes the crypt() function to only return the (MD5-only) salt it was given instead of the correctly hashed string. If you need to replace this immediately, you can pull the latest from the snaps site (or binaries for Windows). Keep an eye out for PHP 5.3.8 in the near future.