Thanks for taking the time to report this bug and helping to make Ubuntu better. I can confirm that this is a problem with with kdm version 3.5.6-0ubuntu12 on Feisty Fawn.
** Changed in: kdebase (Ubuntu)
Importance: Undecided => Medium
Status: Unconfirmed => Confirmed
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switch user in the KDE menu shows logged out users
https://launchpad.net/bugs/73025
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