Some people encrypt passwords using a hashing function (which is a form of "one way encryption" and hence not really encryption at all).
As such, they can't be decrypted (but are still vulnerable to dictionary attacks). This is to defend against people who obtain (authorised or unauthorised) access to the database and decide to try to use peoples' passwords.
Generally speaking, nobody unauthorised should be able to access the database. You have to assume this when developing your app (otherwise, what is the point?)
So storing plaintext passwords is generally speaking pretty safe - especially if the app isn't very security-critical.
Although I've used encrypted passwords in the past, my last two major apps stored passwords unencrypted.
This also makes it easier if a user forgets their password, as you can just email it to them.
Mark