A new variant of the bug is present in the CD install of 10.04 LTS:

On a freshly installed system, with the first user having an encrypted
home directory, the drop down list in "Login Screen Settings" for the
auto-login user is indeed blanked.

If a second user is added - also with an encrypted home directory - the
second user IS selectable as an auto-login user with all the
consequences described above. It seems that only the first user is
"unlisted".

Installed gdm version: 2.30.0-0ubuntu5

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GDM auto login won't work with ecryptfs
https://bugs.launchpad.net/bugs/353446
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