Thanks, that's good to know in the future. But I found another way by editing the insert record under server behaviors and changing the encryption in the bindings panel.
But now I have a new problem! I can see the record in phpMyAdmin and the password is being encrypted (SHA1). But now I can't log in! How do I set the password field in my log in form to be encrypted as well so that when the two entries are compared they will be the same?