Fedora 9 introduced ability to encrypt partitions in installer - AFAIR it's lrw-benbi encryption. It also asks for password if currently encrypted partition is detected, as to continue installation with it available. Now, I have an LVM setup with my PV encrypted using xts-benbi. Partition gets detected, I'm asked for my passphrase and then an error occurs. I guess that installer environment simply lacks needed module(s). Support for algorithms other than lrw-benbi should be added, then users could install Fedora on their already-set partitions. I have no idea if initramfs supports anything other than lrw-benbi, but it should also be found out and (if there's no support) resolved.
We should probably handle preexisting devices with these other ciphers, and I think the mkinitrd support should not be a problem, but for device creation we will, for the time being, keep it simple and stick with aes-cbc-essiv:sha256.
I've successfully deployed Fedora 9 on mentioned LVM-PV-xts-benbi partition setup using Fedora 9 Live CD, so it seems Anaconda and mkinitrd already support custom schemes. That make me pretty sure it's only about including various crypt modules in standard installer environment.
That's right -- the cipher mode is stored in the LUKS header, so cryptsetup can determine it without any trouble. All we need to do is include the modules in the installer's runtime environment and make sure they get loaded.
The lrw and xts modules should be in trees composed with anaconda-11.4.1.30-1 and later. Please reopen if this is not resolved in the aforementioned tree.