I've gotten a number of emails regarding this module, and I've made some improvements based on this input in the latest release. I realize that this scheme has some inherent shortcomings, but my reference on security is "is it more secure than .htaccess?" and I think it is (please correct me if you think not!).
Main code is now in a separate module, LoginMD5.pm, allowing easy integration with existing apps. It also supports persistent user sessions with cookies: once a user has successfully logged in, a cookie is set on the client browser, and that user session remains valid for 1 day (by default). This depends on CGI.pm cookie support.
This is 'proof-of-concept' test code that displays all the CGI parameters passed back by the javascript, showing that everything is encoded. I wrote this for my own application (WebTool) but I figure other people might be looking for something like this. If you want to add/modify code, or turn this into a full-fledged password application, this is released under an open source license, but please include references to both me and Paul Johnson, who wrote the MD5.js JavaScript Code.
Thanks, Alan