Insertion:
INSERT INTO ... VALUES ('bob', MD5('bobspassword'));
retrieval:
SELECT ... FROM ... WHERE ... AND password=md5('hopefullybobspassword');
is how'd you'd do it directly in the queries. However, if your MySQL has query logging enabled, then the passwords' plaintext will get written out to this log. So... you'd want to do the MD5 conversion in your script, and then insert that resulting hash into the query.