For example, Bitcoin Core encrypts your wallet using the Advanced Encryption Standard (AES). This is the same encryption algorithm used by the NSA for its classified information, and AES is considered extremely secure. Only wallets have encryption to protect private keys. Bitcoin Core specifically uses the AES-256-CBC because it's not known to be unsecure and is widely used.
Other wallets may choose to use other encryption schemes. Wallet encryption uses AES-256-CBC to encrypt only the private keys found in a wallet. The keys are encrypted with a master key that is completely random. This master key is then encrypted with AES-256-CBC with a key derived from the password using SHA-512 and OpenSSL's EVP_ByteToKey and a dynamic number of rounds determined by the speed of the machine performing the initial encryption (and updated according to the speed of a computer that later changes the passphrase).
Although the underlying code supports multiple encrypted copies of the same master key (and, therefore, several passphrases), the customer does not yet have a method for adding additional passwords. In this example, Alice uses a compressed Bitcoin address (1Bggz9tCn4Rm9KBZDN7KPRQZ87Sz26samh), while Bob uses a normal address (1LagHJK2Fycv2VZRNhVQg3gyg4tsYWDV4M).