(EDIT: you guys said a bunch of stuff while I typed this so some of this is a repeat of what you already said).
I agree with Laserlight. You need to decide whether adding encryption will really help you. So far, you haven't said anything that suggests that encryption is going to add any security at all.
Saying, "Well, encryption is good, so I want encryption" isn't enough. Putting encryption on data and then putting the decryption key on your web server isn't enough. These don't add a little bit of security - they add zero security. You are wasting your time by adding the encryption.
You need to understand attack vectors. You need to choose a specific problem and find a way to prevent that problem. For example, if you owned a bank, you might decide that a vault is a good idea so you get one with 36 inch thick steel walls. But you need to get at the money so you put the key to the vault in the manager's desk drawer which is locked with a combination lock. Now, how secure is the vault? It's as secure as the desk is. If robbers come into the bank, they beat the manager until they find out where the key is (cut off the pinky, tell them the thumb is next). The wooden desk is one inch thick oak. Now it doesn't matter that the vault is 36 inch thick steel. So if you want to protect the money in the vault, the key has to be stored off site.
So back to your web site. Nobody can read from your database unless they SSH into your server. So some hacker breaks into your server, reads the database, looks for the decryption key, and decrypts the data in the database. You might as well have not even spent the time encrypting it. No security was gained by encrypting it.
So maybe you're saying to yourself, "Well I'm not trying to protect myself from a situation where someone SSH's into my server". That's good, we're half way there. What problem are you trying to protect yourself from? What scenario could happen where you could say, "It was a good thing that I encrypted the data in the database because the hackers got that far but were stumped and got nothing." ?
If encrypting your data isn't going to protect you, then it's not really going to matter much whether you're using good or bad encryption, is it?
If an expert in these forums directs you to the "best" class, it's as if they're saying that you should be using encryption - and so far, the only thing that I can see that encryption is going to give you is the ability to create a theater of security with a big Gee-Whiz factor to impress the managers who don't understand security.
On a different topic, if all you're going to be encrypting is passwords, you do realize that you don't need to decrypt them, right? You can MD5 them, put them in the database, and when someone tries to log into their account, you ask them their password and MD5 the answer. If it matches what's in the database, then they typed the right password.