Confirmed that the same gdm bug still exists on Mythbuntu 10.10 distro. On initial startup of gdm service the timed login works just fine, but after logging out manually it will just sit at the login ID selection screen. We have tried this on fresh installs with the same effect. Using either the timedlogin or autologin options we see the same action. Once a desktop session has been established logging out will leave you sitting at a login selection screen.
This used to work cleanly on our 9.04 setups right out of the box.
In Bug #499337 the reviewer stated that this is not a bug and invalidated that bug report:
How can one use Ubuntu in a kiosk setup if we can't have autologin / timedlogin working everytime?
Our timedlogin config example:
root@tv:/etc/gdm# cat custom.conf