I just installed Ubuntu 12.10, and tied it to my company LDAP. On the login screen, instead of prompting for a password there is just a "Log In" button by my name. I click it, and I am immediately logged in without typing in a password. I checking my User Account options, and "Automatic Login" is turned off. I can also click on other LDAP users accounts, and get in without a password.
There is a local user on the system. When I try to log in as that user, I am prompted for a password.