Encrypting columns, security

I have two questions:

(1) SECURITY BY OBSCURITY :)

I have a table

CREATE TABLE tbl (

password text,
created timestamp not null default current_timestamp

);

I want to make two triggers on select/insert for this. The
trigger for insert should xor password with the first byte
(or something) from created. The trigger for select should
xor it back using the same byte from created. Is this
possible in plpgsql? Where can I read about it? Has anyone
done it?

I want to combine this with:
(2) ENCRYPTING A PASSWORD COLUMN

Has anyone got a tip of how to keep a column encrypted to
assure yourself that noone can steal it? I have thought of
a hash algorithm like ripemd160 but it seems this can't do
the trick because i have to save the key somewhere and
saving it in the database suck and giving it to the user
gives him extra trouble.

Anyone has a tip of doing this?
It would be extra good if I then ould make a function
called verifyUser(text, text) (username/password) that
decrypted it and verifyed it (plpgsql, don't like the idea
of putting C in there).

Hope I was clear enought, thanks for reading through!

Daniel Åkerud