Okay, so I'm learning php, html, and mysql to learn website development (for fun). One thing I still don't get is how to use md5 of sha1 hashes. I know how to hash the plain text, but say I want to make a login page. Since the password is hashed and can't be reversed, how would mysql know that the user-inserted password matches the hashed password in the database? Here is what I mean:

$password = md5($_POST['password']);

$query = ("INSERT INTO `users`.`data` (`password`) VALUES ('$password')");

I know that this snippet of script hashes the password, but how would I use this piece of code and make a login page? Any working examples would be great.