according to the documentation, when setting up the LVM there are two areas you enter a password, one for the root login, and another for the encryption process. Remember root user name is 'root'. Where are you hitting the wall, as you boot up or at login screen? Also you didn't mention are you trying to use Kali in virtualbox as well, like you did with backtrack?. My recommendation, start over, skip the encryption for now as it complicates things. Try to follow the guide; should work painlessly.
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