Installed 5.8.0 from CD (clean install) and selected shadow
and MD5 password through the installation. After reboot
went and checked /etc/shadow and the hash for root's
password was not MD5 until I reset the password manually.
As a note I am unable to verify that this is still an issue
in 5.8.1 but will attempt to reverify in a later beta.
msw will have to take a look at this.