You might be able to get our sample from ch 10 that uses SSPI (Negotiate) authentication along with encryption to work with a local ADAM user by using Digest auth and encryption. I remember trying that once and having success.
You can also use Windows auth to ADAM; it just has to be with a user on the local machine and using the NTLM protocol. Make sure the local machine user has the appropriate permissions if you go that direction.
Another thing you might consider would be to relax the requirement to set passwords using encryption. In that case, you can use whatever binding mechanism you want.
If you are planning to use ADAM for bind authentication, you probably should still be using SSL though. If SSL is an option, then it should not be a big deal to get the required channel encryption to set the password as well.
One big advantage with using SDS.P for the bulk load is that you can also create the user in one big modification operation instead of having to do multiple ones. That should increase perf significantly.