As of Spring Security 3.1.4.RELEASE, the old org.springframework.security.authentication.encoding.PasswordEncoder has been deprecated in favour of org.spr
Having just gone round the internet to read up on this and the options in Spring I'd second Luke's answer, use BCrypt (it's mentioned in the source code at Spring).
The best resource I found to explain why to hash/salt and why use BCrypt is a good choice is here: Salted Password Hashing - Doing it Right.