Firstly need to install libpam-unix2:
Replace the occurrences of pam_unix.so with pam_unix2.so
In /etc/pam.d/common-password, change md5 to blowfish.
New or changed passwords will now be encrypted with Blowfish.
If you want to check if everything worked, look at /etc/shadow and see what the hash looks like:
aptitude install libpam-unix2
Replace the occurrences of pam_unix.so with pam_unix2.so
sed -i 's/pam_unix.so/pam_unix2.so/g' /etc/pam.d/*
In /etc/pam.d/common-password, change md5 to blowfish.
sed -i 's/md5/blowfish/g' /etc/pam.d/*
New or changed passwords will now be encrypted with Blowfish.
If you want to check if everything worked, look at /etc/shadow and see what the hash looks like:
- starts with alphanumeric characters and is 13 characters long - password is encrypted with DES
- starts with $1$ - password is hashed with MD5
- starts with $2$ - password is encrypted with blowfish

Comments (2)
Written by Charles Darke at 2:45am, 25 May 2008.See also issue with gnome-screensaver:
http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=295526
Hopefully, now fixed in unstable.
http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=295526
Hopefully, now fixed in unstable.
Written by Charles Darke at 2:53am, 25 May 2008.
nullok_secure was/is a Debian-specific patch and has not yet been implemented in pam_unix2.so