Password Encryption and Compare in SQL Server 2008

declare @r varchar(50)
declare @t varbinary(255)
set @r='Sa'
select @t=PWDENCRYPT('sa')

select PWDCOMPARE('sa',@t)-- it returns 1(Password correct!)

From  http://msmvps.com/blogs/gladchenko/archive/2005/04/06/41083.aspx