Safely Storing Local Passwords

Jono writes...

Hi Guys,

I am creating an open source Dropbox like project and I am wondering
if there is a best practice for storing passwords on the client
machine.

You have talked about how to salt and hash passwords that are stored
in a database on the server. But if I store the user's password in a
config file in their home directory, hashing it would not do too much
good.

Also, if anyone is interested we are looking for C# developers. This
is much closer to Dropbox then ownCloud:
https://github.com/jonocodes/mybox

Thanks.