I think cpbl is right. I sometimes see usernames flicker for a while
too. I couldnt imagine how GDM could know the passwords? Left in the
history? Special exploit to decode from hashes using dictionary
attacks?:D none of the above is feasible

However, strange things happen sometimes. Diego, if you have some spare
time, could you change your password to something easy to see, but
completely different from your username, eg 999999999 or A*A*A*A*A. I
have a second machine, Pentium II with Ubuntu Breezy (AFAIK this bug was
reported for 5.10), and I cannot reproduce that.

Test and report back the results.

-- 
Login screen briefly reveals the user's password
https://launchpad.net/bugs/43692

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