I've just spent a few days working on GRE with IPSec for a high bandwidth application which includes passing full size UDP frames and resolving the MTU and fragmentation issues.
Also I have to pass and encrypt OSPF so I needed GRE with IPSec, until packet magazine dropped through my door I and mentioned this feature. Although the links in the document referred to on page 86 didnt work it does seem to be the answer to some of my problems.
There seems to be little info about this on cisco.com though, I found a sample configuration and description of commands, but nothing about MTU or performance.
Anyway I'm off to download the code, and try it on my test routers. It could be just what I'm looking for. I'm interested to hear how you get along with this.
Andy