I was chair of the IPSEC working group at the IETF, and I think I know what John Gilmore was referring to with respect to the question of the Initialization Vector. The person who expressed a concern with a per-packet IV (which by the way had indeed done a lot of consulting for the NSA; nice guy, though) didn't like the idea because it's too easy for people to screw up and use an incrementing counter for the IV. This is bad, because if the first couple of bytes in the packet are mostly fixed (becuase you are encapsulating a TCP or UDP packet, for example), the resulting plaintext in the first block of these packets will have a very low hamming distance between them, and this can enable certain cryptoanalytic attacks (i.e., such as differential cryptoanalysis). He was not advocating using the same IV across the entire session, in the sense that we would use the same IV for each packet (which would have been a cryptographic disaster), but rather we use the previous packet's cipherblock as the IV for the next packet (i.e., just keep chaining the cipherblocks).

As is often the case in standards bodies when there is disagreement, neither side won, and we left things unspecified. The RFC doesn't constrain how the IV should be chosen, so you can initialize the IV either way.

There was language indicating that the IV should never be the same, as well as an additional method of generating the IV, by using a Linear Feedback Shift Register (LFSR), which also will eliminate the potential problem of related plaintext being sent to the crypto algorithm. So although the RFC doesn't say this, I would recommend either the use of a LFSR, or the last cipherblock in the previous packet encrypted using that key, and to avoid using a simple counter in your IPSEC implementation for the Initialization Vector (IV) in each packet.

So to be fair, in this particular case, the person with "known associations with the NSA" was actually trying to make things better, although he did feel constrained in not explaining all of his reasons in the open wg meeting. Which no doubt tripped Gilmore's paranoia, and I can't blame him for that either.