cd /etc /usr/sbin/pwconv /usr/sbin/grpconvThat's should be enough. I believe (but I could be wrong) that the newer versions of these two commands handles everything for you. When I looked at the /etc/passwd file, the passwords had disappeared, but I could still login and not login without the correct password (i.e.,it seems to be working).
For more information (but dated 1996), see the Shadow Password HOWTO.