That's a problem with the display manager used by Lubuntu, which should ship 
with adapted PAM config files. See this bug for how it works:
https://bugzilla.gnome.org/show_bug.cgi?id=414862

** Bug watch added: GNOME Bug Tracker #414862
   https://bugzilla.gnome.org/show_bug.cgi?id=414862

** Package changed: gnome-system-tools (Ubuntu) => lxde-common (Ubuntu)

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https://bugs.launchpad.net/bugs/1014295

Title:
  Autologin / Password Asked on Login: Does not work in Lubuntu

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