Yup. Use a hash like MD5 or SHA1 and store the hash of the password, instead of the password itself.
Note that you won't be able to recover passwords for people who forget them, instead you will have to generate new passwords for them and send out a new one each time.
However, in reality, protecting the database only protects against loss of all passwords to a hacker - if you aren't using SSL to exchange passwords then anyone can help themselves at any point on the net between your server and your users.