To add a bit to sde's response, if you still want to use crypt(), then you must make sure you use the salt when you verify their login (see Example 1
http://www.php.net/crypt ). With md5 you don't have to think about this fact since the md5 hash will be the same everytime.
Also, when creating the crypt'ed version of the user's password, you really should be aware of what your server's capabilities are. eg: The default is standard DES (2chr salt), although for my FreeBSD box, PHP will produce a md5 signature with a 12chr salt. (not exactly the same md5 that sde is talking about)
More or less when using crypt, you should provide your own salt to ensure your password formats stay the same. It would suck to move your site to another server and have inconsistent password formats.
-r
(As a side note, I use md5 in projects where I don't have a specific reason to use crypt(). )