I just fixed this in the edubuntu, kubuntu, ubuntu and xubuntu LDM themes by adding this to the greeter-gtkrc files:
# This style removes the ugly resize handles that we don't want on our
# transparent windows
GtkWindow::resize-grip-height = 0
GtkWindow::resize-grip-width = 0
# Apply the style that removes the gtk resize handles
class "GtkWidget" style "remove-handles"
For some reason it doesn't seem to work on the default LTSP theme, but it does on the others. If I copy the entire gtkrc files from one of the other themes, it works. I need to figure out what in the default theme causes the handlebars to remain. Perhaps it's time to update the default theme anyway. I'm taking it up with upstream.