I use a freeradius server acting as 802.1x authentication server. Windows OS use EAP-PEAP encryption by default. That means Windows sends out an encrypted credential to my radius server, and I can not decode it to a clear text password. But without a clear text password, how can I do authenticating in ldap server? Because passwords stored in ldap server are encrypted by some algorithms like MD5, how can I compare the two encrypted passwords encrypted by different algorithms?
You can't. See this compatibility matrix.
You can store passwords in LDAP as Cleartext or as NT-Passwords (unsalted MD4 of 16bit UTF encoding).
As Windows now supports EAP-TTLS-PAP most people use that where they don't have access to the cleartext password or active directory server.