Instapaper stores only salted SHA-1 hashes of passwords, so those are relatively safe. -- Obligatory statement on NEVER USING SHA-1 HASHES to make passwords "safe". Any normal person can brute force millions of SHA-1 hashes (salted however much you want) per second on a GPU. If the FBI so wanted (although I don't believe they do) I'm sure they could brute force almost every single password in that database. Granted,…
I'm just wondering: What if I used SHA-1 a million times on the password, i.e. hashing the hash over and over. Wouldn't that make it much more time-consuming for an attacker? Or am I missing something? The input every time but the first would be a random-looking 160 bit number, so it would be hard to guess. And if the attacker wanna look for common passwords in a dictionary the attacker must hash them a million times…
You usually add a salt (an additional string which is stored in the clear, but which makes your local instance globally unique, so the attacker can't precompute value to hash mappings ("Rainbow Tables" [which are faster to make if you have alien technology, from what I've heard]) for all sites.
I'd still suggest using bcrypt or scrypt.