I usually use SHA1 and salt with the user ID (or some other user-specific piece of information), and sometimes I additionally use a constant salt (so I have 2 parts to the salt).
SHA1 is now also considered somewhat compromised, but to a far lesser degree than MD5. By using a salt (any salt), you're preventing the use of a generic rainbow table to attack your hashes (some people have even had success using Google as a sort of rainbow table by searching for the hash). An attacker could conceivably generate a rainbow table using your salt, so that's why you should include a user-specific salt. That way, they will have to generate a rainbow table for each and every record in your system, not just one for your entire system! With that type of salting, even MD5 is decently secure.