Eager to try this out for myself, I did a quick Google and found a Project RainbowCrack which was a Windows/Linux utility that would brute force crack MD5 hashes amongst other secure algorithms. Thinking it would be shrouded in mathematical terms and phrases unfamiliar to me I didn't hold out much hope that I could get it to do what I wanted; to take a sample of passwords that were stored in MySQL database tables using the MD5() function and crack them for me.
The project builds a number of lookup tables to make the whole process a lot quicker. This in all fairness only took about 18hours to complete on my dual processor 3GHZ machine. After the tables where built it was a simple matter of running a simple command line utility to crack the MD5 hash. Time taken? 1.26seconds! That's how secure MySQL passwords encoded with MD5() are at this precise moment.
Some sample output from RainbowCrack
e:\rainbowcrack-1.2-win>rcrack *.rt -h 7694f4a66316e53c8cdd9d9954bd611d md5_loweralpha#1-7_0_2100x8000000_all.rt: 128000000 bytes read, disk access time: 6.23 s verifying the file... searching for 1 hash... plaintext of 7694f4a66316e53c8cdd9d9954bd611d is qlkjalkj cryptanalysis time: 1.52 s statistics ------------------------------------------------------- plaintext found: 1 of 1 (100.00%) total disk access time: 6.23 s total cryptanalysis time: 1.52 s total chain walk step: 403651 total false alarm: 388 total chain walk step due to false alarm: 579374 result ------------------------------------------------------- 7694f4a66316e53c8cdd9d9954bd611d qlkjalkj hex:71
So really, the only reason to store passwords using MD5() would be to discourage the casual hacker, but it is by no means a secure method as some sites would have you believe. It is fair to note that the RainbowCrack documentation states that salted MD5 hashes can't be broken, but MySQL doesn't salt their implementation so it makes no difference here.