Follow these steps to install new kernel to your sheevaplug :

sudo modprobe ftdi_sio vendor=0x9e88 product=0x9e8f

dmesg (to get wich ttyUSB)

kermit -l /dev/ttyUSB1 -b 115200

> connect

> root / nosoup4u

> reboot

> [during UBoot, cancel boot with a key]

> follow instruction of one new kernel

If you need to reset your uboot environnement : http://www.plugcomputer.org/plugwiki/index.php/Factory_Default_u-Boot_Environment

Kernel with dm_crypt support : http://photon123.dyndns.org/sheeva/README-2.6.31-06466-g4c203e00