Cookie And Db User Authentication

This is a question that has probably been answered before on the
newsgroup but probably in fragments. This is what I would like to do,
and I only have a very vague idea where to find the answer. Directions
would be useful.

1. Users arrive at the site. If they are registered they log in. If not
they sign up for registration.

2. The authentication information such as username and password are
held in a db, for security reasons the password should not be passed in
plain text.

3. When the user is logged in the session information should be held in
a cookie so that if the user returns in a short period of time they
will automatically be logged in. The cookie will also be used to
personalise certain parts of the site.