To increase security even more, You can have md5 encryption along with two different salt strings, one static salt defined in php file and then one more randomly generated unique salt for each password record.
Here is how you can generate salt, md5 string and store:
$unique_salt_string = hash('md5', microtime());
$password = hash('md5', $_POST['password'].'static_salt'.$unique_salt_string);
$query = "INSERT INTO users (username,password,salt) VALUES('bob','".$password."', '".$unique_salt_string."');
Now you have a static salt, which is valid for all your passwords, that is stored in the .php file. Then, at registration execution, you generate a unique hash for that specific password.
This all ends up with: two passwords that are spelled exactly the same, will have two different hashes. The unique hash is stored in the database along with the current id. If someone grab the database, they will have every single unique salt for every specific password. But what they don't have is your static salt, which make things a lot harder for every "hacker" out there.
This is how you check the validity of your password on login.php for example:
$user = //username input;
$db_query = mysql_query("SELECT salt FROM users WHERE username='$user'");
while($salt = mysql_fetch_array($db_query)) {
$password = hash('md5',$_POST['userpassword'].'static_salt'.$salt[salt]);
}
This method is very powerful and secure. If you want to use sha512 encryption, just to put that inside the hash function instead of md5 in above code.