Confirmed. This also causes problems if you try to use aufs to create a sandbox directory for LTSP guest users, like this:

http://kristianlyng.wordpress.com/2010/03/19/a-sandboxed-home-directory/

This fails because xauth can't remove and replace the .Xauthority file when you log in graphically. sshd tells xauth to remove the existing cookie and create a new one. xauth creates .Xauthority-n, tries to remove .Xauthority (which fails), and then tries to hardlink .Xauthority to .Xauthority-n (which fails because .Xauthority still exists):

[pid  1150] send(10, "<39>Dec  7 16:34:12 sshd[1150]: debug1: Forked child 10969.", 59, MSG_NOSIGNAL <unfinished ...>
[pid 10969] execve("/usr/sbin/sshd", ["/usr/sbin/sshd", "-R"], [/* 5 vars */]) = 0
[pid 10969] clone(child_stack=0, flags=CLONE_CHILD_CLEARTID|CLONE_CHILD_SETTID|SIGCHLD, child_tidptr=0xb771cb48) = 11031
Process 11031 attached

[pid 10969] send(4, "<38>Dec  7 16:34:20 sshd[10969]: User child is on pid 11031", 59, MSG_NOSIGNAL) = 59
[pid 11031] clone(child_stack=0, flags=CLONE_CHILD_CLEARTID|CLONE_CHILD_SETTID|SIGCHLD, child_tidptr=0xb771cb48) = 11032
Process 11032 attached

[pid 11032] clone(child_stack=0, flags=CLONE_CHILD_CLEARTID|CLONE_CHILD_SETTID|SIGCHLD, child_tidptr=0xb771cb48) = 11033
Process 11033 attached
[pid 11033] execve("/bin/sh", ["sh", "-c", "/usr/bin/xauth -q -"], [/* 13 vars */] <unfinished ...>

[pid 11032] write(4, "remove unix:38.0\nadd unix:38.0 MIT-MAGIC-COOKIE-1 9296d13c776bd89c10fe65673f3088e5\n", 83 <unfinished ...>

[pid 11033] clone(child_stack=0, flags=CLONE_CHILD_CLEARTID|CLONE_CHILD_SETTID|SIGCHLD, child_tidptr=0xb7880938) = 11034
Process 11034 attached

[pid 11034] execve("/usr/bin/xauth", ["/usr/bin/xauth", "-q", "-"], [/* 14 vars */]) = 0
[pid 11034] open("/home/guest_091221/.Xauthority", O_RDONLY) = 3
[pid 11034] close(3)                    = 0
[pid 11034] read(0, "remove unix:38.0\nadd unix:38.0 MIT-MAGIC-COOKIE-1 9296d13c776bd89c10fe65673f3088e5\n", 4096) = 83
[pid 11034] unlink("/home/guest_091221/.Xauthority") = -1 EPERM (Operation not permitted)
[pid 11034] link("/home/guest_091221/.Xauthority-n", "/home/guest_091221/.Xauthority") = -1 EEXIST (File exists)
[pid 11034] write(2, "/usr/bin/xauth:  unable to link authority file /home/guest_091221/.Xauthority, use /home/guest_091221/.Xauthority-n\n", 116) = 116

Here's how to reproduce it without sshd and xauth:

manager@zambiaserver2:~$ mkdir base
manager@zambiaserver2:~$ touch base/.Xauthority

manager@zambiaserver2:~$ mkdir tmp
manager@zambiaserver2:~$ sudo mount -t tmpfs none tmp

manager@zambiaserver2:~$ mkdir aufs
manager@zambiaserver2:~$ sudo mount -t aufs -o dirs=tmp=rw:base=ro none aufs

manager@zambiaserver2:~$ ls -la aufs
total 4
drwxrwxrwt  4 root    root     100 2010-12-07 16:08 .
drwxr-xr-x 39 manager manager 4096 2010-12-07 16:04 ..
-rw-r--r--  1 manager manager    0 2010-12-07 16:03 .Xauthority

manager@zambiaserver2:~$ rm aufs/.Xauthority 
rm: cannot remove `aufs/.Xauthority': Operation not permitted
manager@zambiaserver2:~$ sudo tail -1 /var/log/kern.log
Dec  7 16:09:04 zambiaserver2 kernel: [ 3445.254650] non-accessible hardlink creation was attempted by: rm (fsuid 1000)

manager@zambiaserver2:~$ sudo sysctl kernel.yama.protected_nonaccess_hardlinks=0
kernel.yama.protected_nonaccess_hardlinks = 0
manager@zambiaserver2:~$ rm aufs/.Xauthority
manager@zambiaserver2:~$ ls -la aufs/.Xauthority
ls: cannot access aufs/.Xauthority: No such file or directory