I don't think this was fully fixed, here is a copy of comment 12 from Bug 
#36855:
https://bugs.launchpad.net/ubuntu/+source/ubuntu-gdm-themes/+bug/36855/comments/12


This issue has security ramifications as well, it leads to passwords being 
logged (which is pretty bad IMO).

If you mis type your username or password, your are prompted to login
again, starting with username. In many cases the user will just type the
password again and hit enter, assuming he is re-prompted for password.
The user is now prompted with the password field, but for him this is
really confusing. Even if the user realizes what happened, there is no
way the username can be fixed, so in most cases the user will hit enter
again.

Two things happen:
- password is exposed in clear on the screen in the username field
- password ends up in clear in /var/log/auth.log (if the user presses enter for 
the second time)

I think the username and password fields should be shown at the same
time, this would eliminate this problem.

The other fix that seems to be implemented in Karmic is to never prompt
for username, use a face browser for that, and only prompt for password.
In some cases you may really not want to list all the available
accounts, so proper username/password fields should be available as an
alternative.

-- 
Too easy to show your password by accidentally typing in the username field at 
login
https://bugs.launchpad.net/bugs/393177
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