I am successfully running encfs & libpam_encfs under Gusty Beta on two
different machines. Libpam_encfs will handle the mounting and unmounting
of the drives as user logs in.

Not sure where your problem arises, encrypted store would normally be
'/home/.enc/other_user/', with both user and group permissions set.

When initally creating the encrypted store did you get asked the
questions about what encryption, etc. to use.? If not the store may have
not been created. Do a 'ls' of the store, should have a '.encfs5' file
along with any encrypted file name. Check you other_user is a member of
the group 'fuse'.

When mounted my encypted drive show as:
encfs on /home/simon type fuse.encfs 
(rw,nosuid,nodev,default_permissions,allow_other,allow_other,user=simon)

My /etc/security/pam_encfs.conf options are:
---
fuse_default allow_other,nonempty
{snip}
-               /home/enc       -               -v                      
allow_other
---

Cheers and good luck,
Simon

-- 
encfs is not working on gutsy
https://bugs.launchpad.net/bugs/148744
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