Password Encryption techniques

I am trying to encrypt the password to store in mysql database. I tried the following:

$pass=$_POST['password'];
$pass=md5($pass);

then I inserted the $pass in database table.

But, it doesn't let me log in using the same password.

When I check the database table, it is stored in encrypted form which is obvious, isn't it?

What may be the problem? is it because of MySQL Version? or ?????????