I've heard talk that IPv6 supports encryption in the IP stack. If this is true, can you give a brief summary of...
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how it works and the benefits?
Yes, that is right. It is IPsec as you may know it from IPv4, with the same features and options. The difference is that the standard mandates that it has to be implemented with every shipping IPv6 stack. So you can assume that your communication partner has IPsec. This doesn't mean it is configured, but it is there. With IPv4 you had to install additional software to get it.
So when you want to know about how it works and what the benefits are, read about IPsec. SearchNetworking.com has a technical tip on how IPsec provides secure communications by contributor David Jacobs. They also have a chapter you can download on Basic IPsec VPN topologies and configurations.
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