Where is encryptPW being called ?

Hi there, the setting passwordEncryptionMode, doesnt seem to be having 
any effect. the method encryptPW is not being called, I have followed 
it all the way through to the insert method in the storage sql builder. 
No such method is being called here, any ideas ?

I have nearly got a complete install/setup by first running the 
installer class, and then a custom xml config which has the 
application, areas, rights and users setup, and a couple of custom 
classes to do the setup, I am finally getting my head around this 
system :)