I have user table in SQL Server 2008 r2. Nothing there is encrypted yet but I would like to at the least encrypt the passwords until the app is ready that will handle this better. Can i do this and how? to manually make the passwords encrypted.
You can encrypt columns using SQL Server, ( see: http://msdn.microsoft.com/en-us/library/ms179331.aspx for a walk-through).
You can also use a key given out from the server itself.
The risk of using this is if you had to do data recovery and move the DB to a different server it would be impossible to decrypt the column (reset passwords would be required).
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