Ah, that bit has been covered in this thread, and I think in JW's guide thread too.
Basically, if you want the password 1234, and your server files ( think its authserver.opt, off top of my head ) has the md5 salt as = 2011,
then you need to use an online md5 generator (fast/easy way to do it)
and enter: 20111234
ie, 2011 + 1234 = salt + password = 20111234
then md5 it, stick the resulting md5 into your db for the accounts.
when you login ofcourse, the password is just 1234, the authserver adds the salt, and md5's it for you.