When it comes to the CAPTCHA you should check to ensure that all of the files got uploaded to your testing server and the live server, if any files were missing it could cause it to behave this way. You will also need to check your PHP on both the local and live site to ensure that you have gd enabled. If you do please post back with the details for the gd module.
To find this info you will need to have a php info page, this is any php page that has this function in it:
<?php phpinfo(); ?>
Scroll down to the modules and look for gd or gd2, it should list some details.
As for the file not being stored in the db have you updated the insert server behavior on the page to associate the uploaded file with the db? You should use the server file name binding to insert into the db. If you are not getting the file in the db then it may not be getting uploaded to the server. You can drag and drop the debug binding onto the page from the Digital File Pro bindings that are available in the bindings tab. When you submit the form next time you should see details about the uploaded file and any reasons for a failed upload.
Sorry about the password question, I skipped over that on accident. The passwords with the User Registration Solution Pack are stored in the db unencryped. If you have Security Assist you can use the encryption functionality from there. If not you should be able to use the php function for sha1. If you encrypt the password in the db then you must encrypt the user entered value for the password before it is compared to what is in the db. Also, it will not be possible for the user to have their password mailed to them if it is encrypted.