I'm not sure what the best way to do it would be. Maybe encrypt the DB password and store it on disk. Then require the admin to enter the decryption password whenever the server is started. The server would load the decrypted password into memory and use it to connect to the DB. It's still vulnerable to a root compromise since the plaintext password will exist in memory, but it would keep the password unreadable on disk. You'd still be vulnerable to key-loggers and the like, of course.

Ultimately it's hard to create a system that can do a given job but won't let an attacker do the same job if they break in.

-sam

You should consider if this is what you're looking for. More convenient would be to make a module doing the SQL connect, and make it chmod 0600.
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Berik

Of course (before anyone else says so) if the machine on which your web-server runs is compromised, all bets are off, but then I fear that it is already too late to do much.