Same issue here with on upgraded quantal from precise lubuntu-core
install. Suddenly stopped working. Reinstall of lightdm-gtk-greeter or
webkit-greeter does not help. I resorted myself into installing gdm as
an addon replacement for lightdm as I was unable to spot root source of
this problem.

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https://bugs.launchpad.net/bugs/842194

Title:
  greeter doesn't start "failed to load session file"

Status in “lightdm” package in Ubuntu:
  Triaged

Bug description:
  As of today, lightdm on oneiric doesn't show a login screen.  I have
  verified the greeters are installed so this is different to bug
  816646.  The most likely lines in the log seem to be

    Failed to load session file /usr/share/xgreeters/.desktop: No such file or 
directory
    Failed to start greeter 
    Stopping display

  I'm just left at a text screen with various stair-stepped log
  messages.

  ProblemType: Bug
  DistroRelease: Ubuntu 11.10
  Package: lightdm 0.9.3-0ubuntu8
  ProcVersionSignature: Ubuntu 3.0.0-10.16-generic 3.0.4
  Uname: Linux 3.0.0-10-generic x86_64
  Architecture: amd64
  Date: Tue Sep  6 08:32:54 2011
  EcryptfsInUse: Yes
  ProcEnviron:
   PATH=(custom, user)
   LANG=en_AU.UTF-8
   SHELL=/bin/zsh
  SourcePackage: lightdm
  UpgradeStatus: Upgraded to oneiric on 2011-08-23 (12 days ago)

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