In SharePoint environment people picker is one of the main part in the farm to provide the users available from all the domains to select the users. By configuring stsadm commands we can grab the users from different domains.
SharePoint will use Application pool identity to search users in active directory. If application pool account is not having permissions to do that, we have to encrypt the password.
To do that we can use following command in STSADM,
stsadm -o setapppassword -password password
We have to set the domains should be searched on WFE for each web application,
stsadm -o setproperty -pn peoplepicker-searchadforests –pv domain:domain1;domain:domain2,domain2\account,password -url WebApplication
Hope this helps.