I'm writing a Facebook canvas webapp that performs a login (using urllib) to a third party website and performs actions on behalf of the user. This means I have 2 accounts; the account the user has with my webapp (via facebook) and the account the app uses to perform a login on their behalf (with user/password details provided by the user).
I obviously don't want plaintext passwords in the DB. But I also don't want the user to have to enter their password every time they perform an action. I want them to enter the password once when they sign up, and I want to encrypt the passwords, but what do I encrypt against? Any key on the server would be available to anyone who had gained access (i.e. useless), so I was thinking of encrypting it against a value available via the Facebook API.
When the user logs in (and gives the app their access token), the app can request the value via the API and encrypt/decrypt their 3rd party password with this. Anyone with access to the server wouldn't be able to make this request without the user being logged in to the app. (This still means someone snooping on the server could get logged-in users 3rd party password, but anyone who got one-off access to the DB couldn't see passwords.) Is this wishful thinking?