By default WordPress uses passes of MD5 128-bit hash value encryption. You can customize to use Blowfish or extended DES with 16 passes of hashing to encrypt your password.

How to use:

<?php $hash = wp_hash_password( $password ) ?>

To change to 16 passes:

$wp_hasher = new PasswordHash(16, FALSE);
$hashedPassword = wp_hash_password($password);

The file can be found in this location:

wp-includes/pluggable.php

More Information:

http://codex.wordpress.org/Function_Reference/wp_hash_password

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