No, I don't think its been decided yet.. Probably just a simple sha256 hash to begin with for simplicity.. But I'd like to see a list of hash options to choose from.  That way clients can negotiate their hash method and choose the most appropriate.. Especially if different ALTcoins run with different hash methods.

No forum post yet.. Here is the proposal..

https://bitbucket.org/JeanLucPicard/nxt/issue/224/proposal-new-tx-type-pay-on-reveal-secret