IMHO the new gdm 2.28 shipped by default with Ubuntu 9.10 is really just work in progress. It's fine for what it currently supports, but it does not support the range of functionality that gdm 2.20 does. Perhaps the biggest issue is Multiseat X. Multiseat X is one of the best things about Linux. You can have several independent workstations all on the same computers, each with their own X Server. Apart from anything else, this can reduce a group of users' carbon footprint by needing fewer computers and should be something that Ubuntu is shouting about and not hiding in some "legacy package" with all its negative implications.
Not only that, the gdm-2.20 package shipped with Ubuntu 9.10 is broken!
Check the bug from here
Note:- This procedure might break you system so use at your own risk
Procedure to Follow
1. Login in to your ubuntu 9.10 system
2. Open up a command line console (Applications->Accessories->Terminal) and enter the following command
sudo /etc/init.d/gdm stop
This will stop gdm, GUI and drop you back into a command line console. A necessary step for downgrading.
3. Login to the command line console and enter the following command
sudo apt-get install gdm-2.20
This will do the necessary work of removing gdm 2.28 and replacing it with 2.20. When prompted to select the default display manager, select "gdm-2.20″.
4. Now you have to fix the broken gdm.conf. Enter
sudo sed ‘s|X11R6/||' gdm.conf >/tmp/gdm.conf
sudo mv /tmp/gdm.conf .
Note:- the period character at the end of the line -- you really do need it
This will edit out the offending entries and replace the broken gdm.conf
5 Start your gdm using the following command
Thanks to Twhyman