Comment 3 for bug 867701

I just encountered and resolved this bug (running unity-greeter 0.2.8-0ubuntu1.3).

Autologin failed and logging in from the display manager just flashed a console and threw me back to the login screen.
Logging in as Guest worked fine.

The root cause seems to have been running sudo startx yesterday. This gave ownership of .Xauthority to root.

Deleting .Xauthority did not work - it just resulted in a misconfigured X session like yesterday. Specifically, it tried to start a GNOME session, despite gnome not being installed or selected.
Switching to lightdm-gtk-greeter did not work - it exhibited the same behaviour as unity-greeter.
Switching to gdm did not work - it completely froze.
Installing and switching to kdm did work - It first attempted to start the GNOME session, but then allowed me to select Xubuntu. This also fixed lightdm.

It seems that my issue was not specific to unity-greeter, so I'll leave this note here for anyone facing similar difficulty.