>One can store the checksum of user+password string into users table instead of literal password.
>
>>Can someone explain or show in code how I can use SYS(2007) to encode/decode a string for example "test123"
>>
>>I guess I dont understand the point of the checksum

A checksum would work but they are generally weak.
You would not want to use a simple checksum for passwords.. A complex hash algorithm would be more appropriate for security reasons. Kind of like Unix uses.