Whole story:

On one laptop, I installed from the mini iso (and chose kubuntu-desktop, the 
mini iso is the same for all *buntu) and found I couldn't login to KDE fully 
because it couldn't write configs (rebooted and tried to login multiple times, 
was driving people #kubuntu-devel nuts trying to figure out if it was KDE's 
fault because KDE was throwing errors).  I logged into the VT and saw that ~ 
had 500 permissions (while logged in as the only user on there).  I did a 
chmod 700 /home/maco  ...and all worked well.

On this laptop, I was trying to figure out why that occurred, and here is where 
I edited the ecryptfs-setup-private script.  The first user I created with 
adduser --encrypt-home was test3.  When that user is not logged in the 
permissions are 755.  When that user is logged in, the permissions are 700.

Then after what you said I did some more testing.  I commented out the if 
statement I had added (so back to the original code) and did adduser --
encrypt-home test5.  When this user is not logged in, the permissions are 500.  
When this user is logged in the permissions are 700.

-- 
netboot newuser and ecryptfs fails to login
https://bugs.launchpad.net/bugs/317895
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