Ok, one question,
how is a better encryption going to change anything?
The passwords are shit, and when dictionairy attacking all of those passwords will most likely be in the top 100 of the dictionairy.
(Except for dragon, shadow, gundam, pokemon and naruto).
But in the end, since a dictionairy attack does not rely on reading anything from the database at all,
it doesn't even matter whether the passwords are encrypted with an extremely strong algorithm or not at all...