I can confirm that this bug is still present in Ubuntu 13.04.

Typically, you'd expect the cursor to change to something progressive
(like an hour-glass or an animated cursor) to indicate that Ubuntu is
"trying to do something". Instead, the system always seems to be locked
up until login completes.

Additionally, in 13.04, there is a little icon like this (next to where you 
enter your password):
http://www.lonniebest.com/FormatCSS/spin.gif

The only difference is that THIS TOO is LOCKED UP during login. It does
NOT spin (like the one in the link above does).

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https://bugs.launchpad.net/bugs/855177

Title:
  Dialog provides no feedback  after entering valid password

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