Can you elaborate on your "database corruption"?  This seems like a much larger problem for you...

In DotNetNuke, passwords are encrypted according to key values which are stored in the web.config file, eg.

    <add key="MachineValidationKey" value="ED67EC2A7332EEB98D59927F5B6E480E700268B7" />
    <add key="MachineDecryptionKey" value="BA219B2EFA53B3F4012F342283FC7EADDF2DD818468B596B" />

If these values are not present in your web.config file, DNN will generate a new set for you automatically.  This is to prevent new installs from using the same default key which would seriously comprise the intergrity of the application for most people.  It is important to ensure that you keep a copy of these keys safe so that you can ensure that they are reapplied if you upgrade your site.  The default release.config file does not have values in it ( as previously indicated ), so if you overwrite your web.config with a new one ( rather than merging changes, or forgetting to copy over your keys )... the result will be a site that nobody can login to beccause of the key change.  NEW users will be unaffected since they are working normally with the new keys... but then the problem will be more difficult because you have users with information encrypted with different keys... not so good.  The general solution to a problem like that is to roll back to your original keys and reset everyone's password who registered after the key change.  That can be done by copying over a known password / password salt combination.

Cheers

Scott Willhite, Co-Founder DNN