From whatscookingamerica.net:

"Tips for softening brown sugar:

Brown sugar becomes hard when moisture in the sugar evaporates. Therefore, the
various methods used for softening brown sugar are intended to return moisture
to the sugar.

* To soften hard brown sugar, place an open bag of sugar in the microwave
with a cup of water next to it. Microwave on high (100%) for 2-3 minutes. If
your microwave doesn't have a carousel, turn the bag after each minute. NOTE:
This works great, but isn't a permanent fix. Any unused sugar will dry up again.
However, the process can be repeated each time you need sugar.

* Place about 1/2 lb. of hardened brown sugar in microwave safe bowl. Cover
sugar with two pieces of wet paper towels. Tightly cover bowl with plastic wrap.
Heat in microwave at HIGH for 1 1/2 - 2 minutes.* Divide sugar with fork (sugar
will be hot); stir. Use immediately. *Microwave ovens vary in power; cooking
time may need adjustment.

* Place a piece of foil or plastic wrap directly on the sugar. Set a piece
of crumpled, dampened paper towel on the foil. Cover container tightly. The
sugar will absorb the moisture from the paper towel and become soft. Remove the
paper towel when it has dried out.

* Place about 1/2 lb. of hardened brown sugar in a bowl. Cover sugar with
two pieces of wet paper towels. Cover bowl tightly with aluminum foil or plastic
wrap. Let stand overnight at room temperature. Divide sugar with fork; stir. Use
immediately."

-- Larry