I happened to write this while I was diging how Magento stores password.
well magento stores hashed password separated by a two character salt in db. A sample looks like
split = 353dc2ba6108461cf3468184bdd0e174:QP
salt = split;
Now lets understand some cryptography Hashing and encryption.
Password hashing and encryption are two different things. Hashing is one way function while encryption is two way. Reverse encryption (called decryption) is possible but you can not reverse hash and generate your original string back. You can find another string which has same hash value by brute force methods.