You don't decrypt authentication passwords!

Hash them using something like the SHA256 provider and when you have to challenge, hash the input from the user and see if the two hashes match.

byte[] data = System.Text.Encoding.ASCII.GetBytes(inputString);
data = new System.Security.Cryptography.SHA256Managed().ComputeHash(data);
String hash = System.Text.Encoding.ASCII.GetString(data);

Leaving passwords reversible is a really horrible model.

Edit2: I thought we were just talking about front-line authentication. Sure there are cases where you want to encrypt passwords for other things that need to be reversible but there should be a 1-way lock on top of it all (with a very few exceptions).

I've upgraded the hashing algorithm but for the best possible strength you want to keep a private salt and add that to your input before hashing it. You would do this again when you compare. This adds another layer making it even harder for somebody to reverse.

Please also consider "salting" your hash (not a culinary concept!). Basically, that means appending some random text to the password before you hash it.

"The salt value helps to slow an attacker perform a dictionary attack should your credential store be compromised, giving you additional time to detect and react to the compromise."

To store password hashes:

a) Generate a random salt value:

byte[] salt = new byte[32];
System.Security.Cryptography.RNGCryptoServiceProvider.Create().GetBytes(salt);

b) Append the salt to the password.

// Convert the plain string pwd into bytes
byte[] plainTextBytes = System.Text UnicodeEncoding.Unicode.GetBytes(plainText);
// Append salt to pwd before hashing
byte[] combinedBytes = new byte[plainTextBytes.Length + salt.Length];
System.Buffer.BlockCopy(plainTextBytes, 0, combinedBytes, 0, plainTextBytes.Length);
System.Buffer.BlockCopy(salt, 0, combinedBytes, plainTextBytes.Length, salt.Length);

c) Hash the combined password & salt:

// Create hash for the pwd+salt
System.Security.Cryptography.HashAlgorithm hashAlgo = new System.Security.Cryptography.SHA256Managed();
byte[] hash = hashAlgo.ComputeHash(combinedBytes);

d) Append the salt to the resultant hash.

// Append the salt to the hash
byte[] hashPlusSalt = new byte[hash.Length + salt.Length];
System.Buffer.BlockCopy(hash, 0, hashPlusSalt, 0, hash.Length);
System.Buffer.BlockCopy(salt, 0, hashPlusSalt, hash.Length, salt.Length);

e) Store the result in your user store database.

This approach means you don't need to store the salt separately and then recompute the hash using the salt value and the plaintext password value obtained from the user.

Edit: As raw computing power becomes cheaper and faster, the value of hashing -- or salting hashes -- has declined. Jeff Atwood has an excellent 2012 update too lengthy to repeat in its entirety here which states:

This (using salted hashes) will provide the illusion of security more than any actual security. Since you need both the salt and the choice of hash algorithm to generate the hash, and to check the hash, it's unlikely an attacker would have one but not the other. If you've been compromised to the point that an attacker has your password database, it's reasonable to assume they either have or can get your secret, hidden salt.

The first rule of security is to always assume and plan for the worst. Should you use a salt, ideally a random salt for each user? Sure, it's definitely a good practice, and at the very least it lets you disambiguate two users who have the same password. But these days, salts alone can no longer save you from a person willing to spend a few thousand dollars on video card hardware, and if you think they can, you're in trouble.

This is what you would like to do:

OurKey.SetValue("Password", StringEncryptor.EncryptString(textBoxPassword.Text));
OurKey.GetValue("Password", StringEncryptor.DecryptString(textBoxPassword.Text));

You can do that with this the following classes. This class is a generic class is the client endpoint. It enables IOC of various encryption algorithms using Ninject.

public class StringEncryptor
{
    private static IKernel _kernel;

    static StringEncryptor()
    {
        _kernel = new StandardKernel(new EncryptionModule());
    }

    public static string EncryptString(string plainText)
    {
        return _kernel.Get<IStringEncryptor>().EncryptString(plainText);
    }

    public static string DecryptString(string encryptedText)
    {
        return _kernel.Get<IStringEncryptor>().DecryptString(encryptedText);
    }
}

This next class is the ninject class that allows you to inject the various algorithms:

public class EncryptionModule : StandardModule
{
    public override void Load()
    {
        Bind<IStringEncryptor>().To<TripleDESStringEncryptor>();
    }
}

This is the interface that any algorithm needs to implement to encrypt/decrypt strings:

public interface IStringEncryptor
{
    string EncryptString(string plainText);
    string DecryptString(string encryptedText);
}

This is a implementation using the TripleDES algorithm:

public class TripleDESStringEncryptor : IStringEncryptor
{
    private byte[] _key;
    private byte[] _iv;
    private TripleDESCryptoServiceProvider _provider;

    public TripleDESStringEncryptor()
    {
        _key = System.Text.ASCIIEncoding.ASCII.GetBytes("GSYAHAGCBDUUADIADKOPAAAW");
        _iv = System.Text.ASCIIEncoding.ASCII.GetBytes("USAZBGAW");
        _provider = new TripleDESCryptoServiceProvider();
    }

    #region IStringEncryptor Members

    public string EncryptString(string plainText)
    {
        return Transform(plainText, _provider.CreateEncryptor(_key, _iv));
    }

    public string DecryptString(string encryptedText)
    {
        return Transform(encryptedText, _provider.CreateDecryptor(_key, _iv));
    }

    #endregion

    private string Transform(string text, ICryptoTransform transform)
    {
        if (text == null)
        {
            return null;
        }
        using (MemoryStream stream = new MemoryStream())
        {
            using (CryptoStream cryptoStream = new CryptoStream(stream, transform, CryptoStreamMode.Write))
            {
                byte[] input = Encoding.Default.GetBytes(text);
                cryptoStream.Write(input, 0, input.Length);
                cryptoStream.FlushFinalBlock();

                return Encoding.Default.GetString(stream.ToArray());
            }
        }
    }
}

You can watch my video and download the code for this at : http://www.wrightin.gs/2008/11/how-to-encryptdecrypt-sensitive-column-contents-in-nhibernateactive-record-video.html

One option would be to store the hash (SHA1, MD5) of the password instead of the clear-text password, and whenever you want to see if the password is good, just compare it to that hash.

If you need secure storage (for example for a password that you will use to connect to a service), then the problem is more complicated.

If it is just for authentication, then it would be enough to use the hash.

If you want to be able to decrypt the password, I think the easiest way would be to use DPAPI (user store mode) to encrypt/decrypt. This way you don't have to fiddle with encryption keys, store them somewhere or hard-code them in your code - in both cases somebody can discover them by looking into registry, user settings or using Reflector.

Otherwise use hashes SHA1 or MD5 like others have said here.

Like ligget78 said, DPAPI would be a good way to go for storing passwords. Check out the ProtectedData class on MSDN for example usage.

If it's a password used for authentication by your application, then hash the password as others suggest.

If you're storing passwords for an external resource, you'll often want to be able to prompt the user for these credentials and give him the opportunity to save them securely. Windows provides the Credentials UI (CredUI) for this purpose - there are a number of samples showing how to use this in .NET, including this one on MSDN.

..NET provides cryptographics services in class contained in the System.Security.Cryptography namespace.

If you need more than this, for example securing a connection string (for connection to a database), check this article, as it provides the best "option" for this.

Oli's answer is also good, as it shows how you can create a hash for a string.

Rather than encrypt/decrypt, you should be passing the password through a hashing algorithm, md5/sha512, or similar. What you would ideally do is hash the password and store the hash, then when the password is needed, you hash the entry and compare the entries. A password will then never be "decrypted", simply hashed and then compared.