For actual encryption, you can try M2Crypto or PyCrypto. Those are probably what you are looking for; however, there are other ways to obfuscate your passwords for the average user:
(if you would like to read some more answers as to what encryption method might suit you best, check out this somewhat related SO post: Recommended Python cryptographic module?
hashlib will provide various hash algorithms (ex. "SHA1, SHA224, SHA256, SHA384, and SHA512"). A simple example:
import hashlib
enc = hashlib.md5()
enc.update("Somerandompassword")
print enc.hexdigest()
And this will print you the md5 "Somerandompassword":
c5532f9e756b4583db4c627c8aa7d303
However, for (base64) encoding, for example, try:
import base64
enc = base64.b64encode("Somerandompassword")
and decoding
dec = base64.b64decode("U29tZXJhbmRvbXBhc3N3b3Jk")
print dec
will print: Somerandompassword