Fixed to dapper-updates and edgy:

" gdm (2.14.10-0ubuntu1) dapper-updates; urgency=low
 .
   * New upstream version:
     - Fix so that GDM does not save the Failsafe GNOME or Xterm
       session as the user's default.
..."

"gdm (2.15.7-0ubuntu1) edgy; urgency=low

  * New upstream release:
    - Now GDM does not save Failsafe GNOME or Failsafe Xterm as the user's 
      default session, so the user does not lose their default setting when 
      using Failsafe.
..."

** Changed in: gdm (Ubuntu)
     Assignee: Sebastien Bacher => Ubuntu Desktop Bugs
       Status: Confirmed => Fix Released

-- 
picking previous session doesn't work after using a failsafe option
https://launchpad.net/bugs/23780

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