Is there anything available that isn’t trivially breakable?
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Original 2008 answer:
Use a proven algorithm. SHA-256 uses 64 characters in the database, but with an index on the column that isn’t a problem, and it is a proven hash and more reliable than MD5 and SHA-1. It’s also implemented in most languages as part of the standard security suite. However don’t feel bad if you use SHA-1.
Don’t just hash the password, but put other information in it as well. You often use the hash of "username:password:salt" or similar, rather than just the password, but if you play with this then you make it even harder to run a dictionary attack.
Security is a tough field, do not think you can invent your own algorithms and protocols.
Don’t write logs like "[AddUser] Hash of GeorgeBush:Rep4Lyfe:ASOIJNTY is xyz"