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Datalink encryption

Hi, I've started playing around with doing encryption with telnet/telnetd
again (I'm cheating and using the rsa/prime number code from pgp-2.0)
and I'm stuck on what to use as the encryption for the actual flow of data.
(hmm...if it works for telnet/telnetd, it can probably be made to work for
 the other r-daemons too :-)

The idea is telnet and telnetd each choose an rsa pub & sec key, then use
rsa to encode a key for the encryption scheme which both ends send and
then use that for the base of the link encryption.

Whatever I use for encryption of the session data has to work quickly
and efficiently and I've got little idea about what to use/how to
and would like some opinions on what would make a good choice.
Any suggestions ?  (Xor seems a possibility but straight Xor is very
easy to break).

I hope I'm not duplicating work that has already been done :)