the standard security assist pages don't use encryption, Power CMS login was created using the standard security assist authentication.
While encryption can be added, in most cases it is a false security. encrypting the password in the database will only prevent someone from accessing the database directly and reading the passwords, the likely hood of that happening is quite small.
or likely way for a hacker to harvest passwords is to use packet sniffing where they are copying the data packets being sent from the client browser to the PHP server.
the way the login works with encryption is this:
* On the login page, the user enters the email address and password, then click the submit button
*When the login page submits, it sends the plain user name and plain password to the server:
email: test@test.com
password: test123
* The server collects the posts information, and converts the password string to the sha1 equivalent:
test123 = 7288edd0fc3ffcbe93a0cf06e3568e28521687bc
* it then looks up the email / pass combo in the database:
SELECT * FROM users WHERE emailAddress = 'test@test.com' AND password = '7288edd0fc3ffcbe93a0cf06e3568e28521687bc'
when the form post is sent to the server, a hacker could harvest that data packet and retrieve the password regardless of whether it is stored in an encrypted format in the database.
The way to prevent that is put your registration and login pages behind an SSL Certificate, this is why i say that encrypted passwords offer a false sense of security, it's really only one part of the larger security puzzle.
There really is no standard on login using a User Name versus Email, most social media sites use an Email Address as the login. Personally, I prefer using an Email address because it is something that the user is more likely to remember, using a username means one more piece of information to remember for login