First, don't obsess too much about your password digest. I know this is head-explodey considering the source, but all I'm trying to do by ranting about it is to get people to stop using SHA1 (or SHA256 or Whirlpool or whatever) hashes. The risk to your users for doing that bit wrong is not very high.

Second, my advice about how to do crypto security is very simple:

* Use PGP for data at rest.

* Use TLS for data in motion.

Do not trust your own judgement (say, by using OTR because it "feels" like most of what you need, or trusting that you'll use Keyczar safely) on anything else without a formal external review. In practice, you will almost never need anything more than TLS or PGP.