I've noticed that there is a problem with joomla1.5 password column.
it basically looks like this
PASSWD_MD5:SALT
PASSWD_MD5 = MD5(PASSWD+SALT);
I've managed to write aprioprioate code which adds new crypt option value for it(5).
works witch stock 0.7-RC1
joomla 1.5 patch for 0.7-RC1