The weaknesses in MD5 are largely overhyped. It is still just fine when used in a salted + iterated password hash system. Even shitty old DES would be fine in this system, if not for the tiny keyspace.
Don't want to start a fight about password encryption types... but MD5 was not created to encrypt passwords... it was created to check data integrity. Don't forget the beautiful bruteforce rainbowtables you can download.
Personally I always use SHA256, which is barely decent.
True, but unimportant. And rainbow tables are of absolutely no help for an iterated salted password system.
There are a lot of things that MD5 is no longer secure enough for. This is not one of them. The security is in the details, the iteration and salting scheme, not the hashing algorithm.