You *could* do that but it'd be somewhat unsafe to do, especially if it were MD5. Make that SHA1 and it's slightly better, though not a lot. Unless specially coded, it could be brute forced.
Suggestion 1: When they do actually log in, make sure they tick 'Forever'. Means they won't have to remember their password. Downside is that the browser is remembering something about their login.
Suggestion 2: Use OpenID, which means their login will be tied to another site. For example, I have a LiveJournal account, and I can set up an account on SMF such that my LiveJournal login details will let me in. Downside is that only OpenID 1.0 is supported in SMF 2.0, and OpenID 1.1 support is under development meaning it won't work on all sites that would otherwise support it.