I can confirm this behaviour - changing the time server in time-admin
correctly updates /etc/ntp.conf, but the NTP service is not restarted.
The NTP service doesn't use the new server until it is restarted.

For completeness, steps to reproduce:

1) In a terminal, type 'ntpq -p' and note the server being used
2) Do a cat /etc/ntp.conf in the terminal and note the server being used
3) Open time-admin, unlock, click 'Select Servers', and then change the server 
you wish to use.
4) Do cat /etc/ntp.conf again, comparing the result to that obtained in step 
2). Note that the server is updated correctly.
5) Do 'ntpq -p' again, comparing the result to that obtained in step 1). Note 
that the old server is still being used.
6) Do /etc/init.d/ntp restart
7) Compare the output of 'ntpq -p' to that obtained in step 5). Note that the 
new server is now being used.

[EMAIL PROTECTED]:~$ lsb_release -rd
Description:    Ubuntu 8.04.1
Release:        8.04
[EMAIL PROTECTED]:~$ apt-cache policy gnome-system-tools
gnome-system-tools:
  Installed: 2.22.0-0ubuntu9
  Candidate: 2.22.0-0ubuntu9
  Version table:
 *** 2.22.0-0ubuntu9 0
        500 http://archive.ubuntu.com hardy/main Packages
        100 /var/lib/dpkg/status


** Changed in: gnome-system-tools (Ubuntu)
       Status: New => Confirmed

-- 
[time-admin] Doesn't restart ntpd after changing time servers
https://bugs.launchpad.net/bugs/245192
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