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Release: 10.04b2 (Without any updates installed)/ 9.10 (Same problem)

What happens: When you login the screen flashes (Possible crash somewhere) and 
you're back at the login screen
What should happen: You login and your desktop appears.

Reproduction steps:
1. Install ubuntu to a usb stick with persistence
2. Create a second account with an encrypted home folder
3. Logout from the ubuntu account and login to the second account
4. Screen flashes and you're back at the login screen.

** Affects: gdm (Ubuntu)
     Importance: Undecided
         Status: New

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Persistent Live USB Install Encrypted Home Folder Login Crash
https://bugs.launchpad.net/bugs/563907
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Bugs, which is subscribed to gdm in ubuntu.

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