A problem with many challenge-response login systems is that the server has to store a password equivalent. For example, if the server stores SHA1(salt + password), and an attacker captures that hash, then they would be able to directly use the hash to login, without having to crack the password.
I believe there are some variations of challenge-response login that avoid this weakness. In particular, I have heard that newer versions of MySQL have fixed it. I do not have any references or further information on this, but I would like to know how this can be done. I can imagine some approaches myself, but I would prefer to use a standard, peer-reviewed protocol.
I am aware that SRP solves this problem. However, SRP is more a public key protocol rather than challenge-response. I am particularly interested in protocols that only use symmetric ciphers, hashes, and maybe some XORing, etc.