How can I get the real password via hook_user_update()? I want to change the current user password, and get the new password(the real password, not md5 encryption) when edit the account profile via user profile form(e.g.: example.com/user/1/edit) and save. would anyone can tell me how to do that? I tried using hook_user_update(), but it didn't succeed.

I mean I want to change the current user password, and I want to get the new password.
Implement hook_form_alter() (or one of it relatives) such that it array_unshift() a new submission handler to the user update form. The submission handler should add the password to the $form_state['values'] array. You also have to add the same key to $form_state['user'], because of the way user_profile_form_submit() calculates which keys from $form_state['values'] to pass as $edit to your hook_user_update() implementation.

If you did not insist on using hook_user_update(), I'd suggest handling your custom additions to the password update directly in your submission handler.

By the way, Drupal 7 does not use a simple MD5 hash to store passwords.