My typing isn't fast enough to make the workaround work, so I've had to stick 
to Plan B and continue to use auto-login :)
When the greeter flashes up it is:
1) showing the default purple
2) sitting on the guest user 
I don't know if either of these is significant.....

I still have the problem with a background in a "standard" location 
(/usr/share/wallpapers or my Pictures/ folder) or when 
the user background is made unavailable by changing permissions.

The problem is only showing up at the minute on two dual monitor
machines with Intel graphics, everything else I have tried (including
another dual monitor setup with an nvidia card) is still OK.

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https://bugs.launchpad.net/bugs/971437

Title:
  lightdm crash/loop after recent 12.04 beta updates

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