I have exactly the same problem as the reporter of this problem (running 
Xubuntu 8.10 with the latest updates).
I did the following:

1) Changed password using the "Users Settings" dialog
2) Rebooted
3) Logged in as the same user with the new password
4) Discovered that there is no directory ~/Private

When I tried to mount it manually, that is by running "mount.ecryptfs_private",
I got the folowing error:

keyctl_search: Required key not available

The only way I have been able to get into the ~/Private directory is by
changing the password back to what it was originally.

eboy

PS In my opinion this is a bug with utmost priority, because it concerns
data loss (at least as perceived by the average user) in the stable
Xubuntu distribution.

-- 
ecryptfs-utils does not handle changing password
https://bugs.launchpad.net/bugs/283477
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