You could apply the encryption on the password value in the insert server behavior on the registration page. This will make it store as encrypted, next you would need to update the login page to encrypt the value that the user is entering before it is compared to the value in the db.
We have a Solution Recipe that covers the process but it is not specific to the URSP. I would suggest that you get an understanding of the process from this before you try to apply it to your site. Make sure to backup any pages before you work on them.
securityassist/
As for updating the existing users it is possible to do this but it would require you to access the records in the db, pull up the password value, then encrypt it and update the record with the encrypted password. There is not server behaviors or automatic process for doing this, you can do it manually in the db or you can do it with a php page.
