I hope that by now everyone here is aware that this is ridiculous advice. Please, please, don't learn about cryptography in order to store passwords. And don't implement your own half baked scheme. Listen to the people who know more about it than you or I ever will, and then use their software.
Great post, Nick!
I really think this whole case is badly handle by LinkedIn - both in terms of storing the passwords and the PR when the leak was made.