For me even the default password "123123" does not work. What I see after installation of Foreman 1.3 RC4 is some encrypted text in settings. But it apparently does not work well with Anaconda.

Couple of observations:

Default password set in settings in a clean installation is: xybxa6JUkz63w

When I create a new host with no password set, it renders to this in kickstart:

rootpw --iscrypted xybxa6JUkz63w

I am not sure if this is correct at all, I'd expect $N$salt$hash there. Anyway, it does not work, I cannot login with "123123".

When I try to change default pass in settings to anything, it renders again as:

rootpw --iscrypted anything

Which does not work at all for me. I am testing RHEL6.

The last part of what you say is correct. Since the Setting asks for the encrypted password, I would indeed expect a Setting of "anything" to render as "rootpw --iscrypted anything".

Looking at app/models/concerns/host_common.rb#96 for normal host(group) passwords we test for a $ at the start of the string and encrypt if it's not present. We don't do this at app/models/host/managed.rb#592, so the correct solution is probably to test for a $ in the setting and add a random hash to the start if it's not already there.

In case anyone asks, I don't think it's correct to store either the salt or the unencrypted password in the Settings menu - it's accessible to many levels of user permissions.