Hashing a hash has numerous negative effects actually. A simple md5($salt.$password) [or a different hash if you prefer] would be more than sufficient in most cases. What is the point on going so overboard if you aren't something that would justify that, such as a bank? There are tons of real world examples that you would never be so extensive over something so simple, why is hashing any different?

Of course if security really is that big of a concern, then you should be skipping all that hash of a hash mumbo jumbo anyways and go right to something like a SHA-512 algorithm.