diff -u -p -r password_policy.old/constraints/constraint_history.php password_policy/constraints/constraint_history.php
--- password_policy.old/constraints/constraint_history.php	Thu Jun  4 13:38:50 2009
+++ password_policy/constraints/constraint_history.php	Wed Jul 22 23:34:16 2009
@@ -23,13 +23,25 @@ class History_Constraint extends Constra
       // gathered to operate fully.
       $testSize = min($this->minimumConstraintValue, $recordedHistorySize);
 
-      $count = 0;
-      $passwordToCompare = md5($plaintext_password);
       $failed = FALSE;
-      while ($values = db_fetch_array($result)) {
-        // if we found one password which matches, then we've failed
-        if ($values['pass'] == $passwordToCompare) {
-          $failed = TRUE;
+      
+      if (module_exists('phpass') && variable_get('user_hash_method', 'phpass') == 'phpass') {
+        require_once(drupal_get_path('module', 'phpass') .'/PasswordHash.php');
+        $phpass = new PasswordHash(variable_get('user_hash_strength', 8), variable_get('user_hash_portable', TRUE));
+        while ($values = db_fetch_array($result)) {
+          // if we found one password which matches, then we've failed
+          if ($phpass->CheckPassword($plaintext_password, $values['pass'])) {
+            $failed = TRUE;
+          }
+        }
+      }
+      else {
+        $passwordToCompare = md5($plaintext_password);
+        while ($values = db_fetch_array($result)) {
+          // if we found one password which matches, then we've failed
+          if ($values['pass'] == $passwordToCompare) {
+            $failed = TRUE;
+          }
         }
       }
       return !$failed;
diff -u -p -r password_policy.old/password_policy.install password_policy/password_policy.install
--- password_policy.old/password_policy.install	Fri Oct  3 17:36:22 2008
+++ password_policy/password_policy.install	Wed Jul 22 22:33:35 2009
@@ -19,7 +19,7 @@ function password_policy_install() {
       ) /*!40100 DEFAULT CHARACTER SET utf8 */");
       db_query("CREATE TABLE {password_policy_users} (
         uid int(10) unsigned NOT NULL default '0',
-        pass varchar(32) NOT NULL default '',
+        pass varchar(60) NOT NULL default '',
         created int(11) NOT NULL default '0',
         KEY (uid)
       ) /*!40100 DEFAULT CHARACTER SET utf8 */");
@@ -92,6 +92,19 @@ function password_policy_update_5000() {
     case 'mysqli':
       $ret[] = update_sql("ALTER TABLE {password_policy_users} ADD KEY (uid)");
       $ret[] = update_sql("ALTER TABLE {password_policy_expiration} ADD KEY (uid)");
+    break;
+  }
+
+  return $ret;
+}
+
+function password_policy_update_5001() {
+  $ret = array();
+
+  switch ($GLOBALS['db_type']) {
+    case 'mysql':
+    case 'mysqli':
+      $ret[] = update_sql("ALTER TABLE {password_policy_users} CHANGE pass pass varchar(60) NOT NULL default ''");
     break;
   }
 
diff -u -p -r password_policy.old/password_policy.module password_policy/password_policy.module
--- password_policy.old/password_policy.module	Thu Jun  4 13:32:54 2009
+++ password_policy/password_policy.module	Wed Jul 22 22:12:52 2009
@@ -604,7 +604,15 @@ function password_policy_user($type, &$e
  * used previously.
  */
 function _password_policy_store_password($uid, $pass) {
-  db_query("INSERT INTO {password_policy_users} SET uid = %d, pass = '%s', created = %d", $uid, md5($pass), time());
+  if (module_exists('phpass') && variable_get('user_hash_method', 'phpass') == 'phpass') {
+    require_once(drupal_get_path('module', 'phpass') .'/PasswordHash.php');
+    $phpass = new PasswordHash(variable_get('user_hash_strength', 8), variable_get('user_hash_portable', TRUE));
+    $hash = $phpass->HashPassword($pass);
+  }
+  else {
+    $hash = md5($pass);
+  }
+  db_query("INSERT INTO {password_policy_users} SET uid = %d, pass = '%s', created = %d", $uid, $hash, time());
 }
 
 /**