Thank you Nikola for your effort with determining why "Don't ask for
password on login" was greyed out.   I tried your solution of creating
the "nopasswdlogin" group and it did indeed allow that option to be
selected.  However, upon restarting, the users that I selected still had
to enter their password at the GM login screen.

I eventually found a different resolution at ubuntu forums
http://ubuntuforums.org/showthread.php?t=12777&page=2.  The thread is
very old but the solution still works with Karmic.  The only difference
is to change the location of /etc/X11/gdm/nopassusers.txt to
/etc/gdm/nopassusers.txt

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auto-login settings not migrated
https://bugs.launchpad.net/bugs/396459
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