Beginners Question - How do I integrate my application database with Drupals?

I have a application database hosted on server side which has 'account information' table for all my handheld users. They store their usernm and password in this table along with a GUID as a primary key
Now I am adding a Drupal website in the scene, and expect that all users creating a account on my Drupal site should have access to the handhelds also.
Not getting a single clue on how to do this.

Is it the best approach if I add some custom code in Drupal 'create account' or 'login' pages and insert/lock records from my application servers database? If yes then what is the best place to insert such a code in Drupal?

thanks much in advance!