Second answer: it depends on how complex you want to get. But in any case, you will need the server to act in conjunction, because the server needs to decrypt things on its end. If the password is all you need to be encrypted, I can think of the following alternatives:

• Use SSL. A search for ssl in cpan reveals Crypt::SSLeay, IO::Socket::SSL and some others. I've not used any of them, though.
• Use S/Key (also known as OPIE for "One-time Passwords in Everything). This is a technique specifically designed for sending passwords, and is very effective and even standardized (try RFC1760 and RFC1938). Unfortunately, I don't think there is a Perl module for computing S/Key challenges/responses. Also, S/Key is a higher-maintenance system, because the user needs to reset his passwords every once in a while. One good place to start looking for implementations is http://www.inner.net/pub/opie/.

--ZZamboni