[icebraining]

You realize that hashing the password and sending the hash over the wire in lieu of the plain-text password still gives people sniffing at least the username for the account and a hash of the password that could (in a disturbing number of cases) be looked up in a Rainbow Table.

No. Getting the username and cracking the hash is the least of your concerns. The problem of just hashing the password and sending it over an unsecured channel is that you're vulnerable to replay attacks: the attacker doesn't need to crack it, just re-send the hash. Essentially, the hash becomes a plain-text password.