When the Notes driver creates a user, it always seems to use 64-bit
encryption for the user ID file. When I manually register a user, under
the password options I can set a the "Encryption Strength" to 128-bit.

I'm not sure if this is related to the "North American Server"
configuration flag, but this flag is set correctly regardless:

<north-american-flag display-name="Is Domino Server North

Is there a way to specify the strength of the id file encryption?

--Matt Goldsberry