I'm experiencing the same problem on a (arguably fairly underpowered, but 
dual-core) Intel Atom D510MO running Ubuntu 10.10 server (amd64).
RAID1 on 2 x 2TB SATA drives, a single dm-crypt on top of that which contains a 
single LVM VG with two LVs for / and /home.

2 Clients (one with a 100MBit/s, the other with a 1GBit/s connection to
the server, the server itself is connected with 1GBit/s) making backups
on a SMB share on /home.

If only the 100MBit/s-client is pumping out data, kcryptd uses ~30% CPU, iptraf 
showing ~90MBit/s traffic incoming, system responds quite nicely.
If the 1Gbit/s-client starts to pump out data in parallel, kcryptd jumps to 
100%, making the server virtually unusable as far as IO is concerned (takes 
ages to login or even start top, but it's fine if it doesn't need IO). 
Surprisingly, iptraf only jumps up to max. 120MBit/s incoming while this is 
happening, so there's not *that* much more traffic to handle, but now probably 
coming from 2 separate SMB threads.

I found this recent commit to Linus' tree which could solve this
problem. The dm-crypt scalability patch from Andi Kleen apparently was
in development for quite a while and according to the commit message
seems to address this problem.

http://git.kernel.org/?p=linux/kernel/git/torvalds/linux-2.6.git;a=commit;h=c029772125594e31eb1a5ad9e0913724ed9891f2

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https://bugs.launchpad.net/bugs/529510

Title:
  kcryptd using 100% IO load

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