IMHO the new gdm 2.28 shipped by default with Ubuntu 9.10 is really just work in progress. It's fine for what it currently supports, but it does not support the range of functionality that gdm 2.20 does. Perhaps the biggest issue is Multiseat X. Multiseat X is one of the best things about Linux. You can have several independent workstations all on the same computers, each with their own X Server. Apart from anything else, this can reduce a group of users' carbon footprint by needing fewer computers and should be something that Ubuntu is shouting about and not hiding in some "legacy package" with all its negative implications.
Not only that, the gdm-2.20 package shipped with Ubuntu 9.10 is broken!
I would certainly recommend downgrading to gdm 2.20 to get the most out of your Ubuntu installation and the following is how you do it:
1. Start up 9.10 and login.
2. Open up a command line console (Applications->Accessories->Terminal) and enter:
sudo /etc/init.d/gdm stop
This will both stop gdm and the GUI and drop you back into a command line console. A necessary step for downgrading.
3. Login to the command line console and enter:
sudo apt-get install gdm-2.20
This will do the necessary work of removing gdm 2.28 and replacing it with 2.20. When prompted to select the default display manager, select "gdm-2.20".
4. Now you have to fix the broken gdm.conf. Enter
sudo sed 's|X11R6/||' gdm.conf >/tmp/gdm.conf
sudo mv /tmp/gdm.conf .
(note the period character at the end of the line - you really do need it)
This will edit out the offending entries and replace the broken gdm.conf
5 Restart gdm