3.12. System configuration
you are given the option to choose a password encryption scheme. While “DES” is the standard algorithm used on most Unix systems, “MD5”, “Blowfish”, and “SHA1” allow longer passwords than DES, which only uses the first eight characters of the password that is entered. DES is still useful for interoperability with other operating systems.
In particular i don't understand what type of interoperability could be affected by the choice of a different password encryption scheme.