If you use .NET for your application try to use Bonnie.NET at
http://www.we-coffee.com/bonnie.aspx. It's a free dll that manages all cryptographic need.
To protect your password, probably the best choice is to use hash functions. If someone stoles your password an hash cannot be rever to the initial value. An attacker could try a sort of brute force attack not directly with the passwords use to discovery your password but hashing them first, making the hash not safe. To avoid this problem try to use keyed hash function (for example HMACSHA1). Bonnie.NET let you to do so.