SQL Server Authentication using encrypted password

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I am keeping the SQL Server password in clear text, which is a security threat now.

I would like to replace this with encrypted password. But I don't know whether SQL Server accepts encrypted password or not. Or if there is some other solution for it.

Any help on this is appreciated.

Lokesh

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SQL Server requires that the password specified in the connection string be set in plain text. If the password is stored encrypted, the connection string can be dynamically created and the password decrypted for use in the connection string.

To keep the password safe at a network level, things such as SSL based connections to SQL Server or IPSEC can be leveraged to provide protocol safety.

http://technet.microsoft.com/en-us/library/bb742429.aspx

http://technet.microsoft.com/en-us/library/ms189067(v=SQL.105).aspx