In a Master-Local and/or Master-Redundant-Master setup the controller will communicate which eachother using IPSec tunnels. These IPSec tunnels can be established either through PSK's or factory certificates; these certs are issued based on the MAC address of the controller.
In most cases I will use strong PSK's, but you can go either way...
I have never used the setup dialog to setup clustering, I ussually bring up each controller as a master and take it from there. The setup dialog will not account for things like LACP for example.
Also check out the Aruba Mobility Controller VRD: http://www.arubanetworks.com/wp-content/uploads/MControllerVRDV9.pdf
#7240