You're exactly the guy I'm talking about. "Oh, I use AES, but I don't just use AES; I store the secret IV for AES in a cookie so even my server can't decrypt it unless the client comes back with the IV so it's like two guys in the silo with the missile keys". Seriously, I just found that piece of code yesterday. Did you write it? Stop writing that stuff.
A part from the obvious flaw of including part of the password in plain text, how secure is this method compared to the following method were the salt is not a secret and were the concatenated hash + salt is hashed?: saltedhash(password)=hash(hash(password).salt)
The real error was misreading the man page and using the first two characters as the salt, which is then published as the first two characters of the hash. It's sort of an easy error to make, because to decrypt, you do use the first two characters of the hash. Understandable for a beginner working on a school project, but pretty ludicrous for a large company holding control over most of the domains on the internet at the time.
I know there's lots of ways to screw up security, but most of them derive from lazy people taking shortcuts. They run the httpd, database, and authentication all off the same server so a vulnerability in one compromises all. They store secrets in the database because figuring out secure storage would take half an hour of research.
Replacing a poorly-implemented SHA1-based system with a poorly-implemented bcrypt-based one won't help security.
If the entire knowledge you have of cryptography comes from _Applied Cryptography_ --- wait; let me extend that: if you even feel the need to cite _Applied Cryptography_ --- you should be careful debating crypto constructions. You're not going to end up happy.
Anyone can create an input that hashes to a given value. The relevant factor is how long it takes to create that input. I hope you can see the difference between that process taking 3 seconds vs 40 years.