Is the "Rest Password" recommended when using encryption at-rest? The SLES install document indicates that it is optional but you'd think the salt table should be protected. What sort of security impact results from not entering a rest password?

If no rest password is specified, a password will be generated when the first salt is added.

Any recommendations on what should be used for the rest salt? Would a simple 5-10 character string be enough?

Since this is the initial rest salt, you can use basically anything. Salts are rotated periodically anyway. Avoid using special characters in the GUI interface -- there's a known issue with special character handling in the at-rest password and initial at-rest salt fields. If you have a requirement to use special characters in the salt or password, you can skip setting these parameters in the GUI and use avmaint atrestencryption --restsalt= and avmaint atrestencryption --restpassword= to set them after the install is complete (but before any customer data is added to the system).

It my understanding that Avamar, when writing backups to a Data Domain system, cannot encrypt the data. In order to protect data on the Data Domain does EMC support leveraging DD's own data at-rest encryption services in conjunction? I understand that in an ideal scenario these backups would be best stored locally on the Avamar server.

I believe that this is not possible right now but there are plans to support it in a future version.