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I understand it is initialization vector, but what is it ? Is it appended at the beginning of each packet as a key piece? Is it used to encrypt the entire packet? What does IV do exactly?

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right but I didn't quite understand it :S –  Howdy_McGee Dec 5 '11 at 3:43
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The IV is included in each packet and is different in each packet. It is used to generate a distinct "packet key" for each packet, the packet key consisting of the fixed master key and the initialization vector.

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so it doesn't really encrypt as much as supply necessary information? –  Howdy_McGee Dec 5 '11 at 3:46
    
It's sent in the clear over the wire, but it does encrypt because it is part of the key. The point is to encrypt each packet with a different key. –  David Schwartz Dec 5 '11 at 4:01
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