Well, I can tell you how to get around it and still encrypt the disk:
1) Select manual partitioning
2) Create a ~300MB partition, set it to ext4, set it's mount point to /boot.
Make sure to set it bootable.
3) Create a partition about 1 to 1.5 the size of your physical ram to be used
as an encrypted swap space (some people like to do this, some don't - up to
you.) Set the type as space for encryption (not swap), set the passphrase
type as "random passphrase". Make sure to set the IV method to
cbc-essiv:sha256
4) Create your data partition. set it also as physical space for encryption,
but leave it set for a password/passphrase rather than random. Likewise,
remember to change the IV method from xts-plain64 to cbc-essiv:sha256
5) Use the option to initialize encryption.
6) Use the Create encrypted volumes option. Select the two encrypted
partitions you just set up.
7) Finish the encryption setup. It should ask you for only one passphrase
(you enter it twice for verification)
8) When you get back, it should have already set the smaller encrypted
partition to "swap". Select the other one and set it to mount as your root
partition.
9) Continue on your way.
There are probably some implications to changing the IV method from
xts-plain64 to cbc-essiv:sha256, so if that's important to you make sure to
research them - I know Ubuntu used to default to cbc-essiv and now goes to
xts-plain64, so I'm assuming it has enhanced security. At least this way you
aren't completely without a full disk encryption option however.
Also I typed that all up from the top of my head, so I'm sure I misnamed
something - let me know if you need my help and I can run through it and tidy
up my descriptions.
As to why xts-plain64 causes a failure on the T60, I haven't worked out. It
worked fine in a VirtualBox install I just did. Perhaps it's processor
related?
By the way, I have a couple of these - it should run well for you on the base
T60 with Intel graphics, but you'll probably need a usb wifi adapter if you
don't already have one. The t60p is a tragedy- it comes with an Atheros wifi
card but the ATI graphics :( The other real bummer is the T60s with nVidia -
the graphics work with nouveau but the quality of the video hardware was
pretty spotty. At the computer recycler where I got my T60s they told me they
pretty much junk the nVidia ones straight away since they cause them a lot of
problems.