I am facing the same issue in my Ubuntu Server 12.04.1 64bit [transmission version: 2.51 (13280) ] and Raspbian Wheezy [transmission version:2.52 (13304)].
I do not use transmission in Ubuntu server, and noticed the same after facing the issue in raspbian, but on raspbian, I have previously always logged in with pi/raspberry without any problem.
I am facing the same issue in my Ubuntu Server 12.04.1 64bit [transmission version: 2.51 (13280) ] and Raspbian Wheezy [transmission version:2.52 (13304)].
I do not use transmission in Ubuntu server, and noticed the same after facing the issue in raspbian, but on raspbian, I have previously always logged in with pi/raspberry without any problem.