Hello,
at the moment I can confirm you the "problem" is still present in a fresh 
installation 10.04 LTS

$ cat /etc/issue
Ubuntu 10.04.1 LTS \n \l

on the same machine described previously.

1. log in the gui as admin user (the first one created during
installation)

2. create a new user using System->Administration->Users and Groups
and checking something as "encrypt home folder"
(in italian it's "cifra la cartella home per proteggere i dati sensibili")

3. switch user (test) using the applet "change user"
"Applet cambio utente 2.30.0
2004-2005 James M. Cape.
Copyright © 2006 Thomas Thurman.
Copyright © 2008 Red Hat, Inc."
added to the panel

4. create a text document on the desktop (hello)

5. switch back to admin user with the same applet and open a terminal

$ sudo su
$ cd /home/test/Desktop

I can see qnd open the document "hello"

6. log out form admin .. log in test and reboot

7. log in admin and open a terminal

$ sudo su
$ cd /home/test/Desktop

I can see the document "hello"


I will try on maverick as soon as I can, if needed.

---------------------------------------------

$ uname -a
Linux pc-luca 2.6.32-26-generic #48-Ubuntu SMP Wed Nov 24 09:00:03 UTC 2010 
i686 GNU/Linux

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https://bugs.launchpad.net/bugs/576254

Title:
  lucid lynx doesn't encrypt home folders

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