The registration page should be storing the password in the database in encrypted format. To accomplish that, you need to remove the Dreamweaver insert record server behavior, and replace it with the DataAssist Insert Record Server Behavior. The DataAssist insert record server behavior will allow you to apply the SHA1 formatting to the password column.
See the Introduction to SecurityAssist -> Modifying Registration tutorial in the Solution Recipes Section of the Security Assist support page:
securityassist/