Hello,
Its been a few months since I've been on here. In June I moved jobs and have gone from an institution using UNIX UNIX UNIX, to MICROSOFT MICROSOFT MICROSOFT so no LDAP server for me to play around with, and therefore havent been able to develop this any more since release. Good news MalcolmX decided to release his version for free after I spent hours figuring this thing out!! I've not tried his version but its good to give people choice

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Anyway....
ckm, yes it is correct. Vbulletin re-hashes the MD5 with a "salt" key. Its like an extra layer of protection. Salt is just a random 3 digit character made up when a new user is created. Its then used to encrypt the password. Does that make sense?
I'll try and get LDAP up and running somewhere so I can develop this a bit further. It works as is but I could add a few extra neat touches.