When doing a graphical install, root passwords over 8 characters get truncated to 8 characters. After install, running passwd on the root account to change the password sets the password correctly.
This is caused due to the installer using 'crypt' not 'MD5' when creating the original Shadow/Password file, even when MD5 is chosen in the installation process.
Oh yeah, this is only for root. Any other accounts will be created in the desired encryption method.
*** Bug 9034 has been marked as a duplicate of this bug. ***
I have just installed RH6.1 and had a similar problem with an 8 character password of the form q"99wert. It would appear that using non alphanumeric characters does not work (it did on RH5.1). With the password of the above style, it was possible to su in an X terminal, but not log on directly.
Issue has been resolved in the latest cut of the installer (available in beta)