I work with matt (the original reporter) and it is still not working for us. We got around it for a while with some sed magic.
Our user config section looks like: rootpw --iscrypted xxxxxxxxxxxxxxxxxxxxxxxxxx user --disabled auth --useshadow --enablemd5 --enablenis --nisdomain ournisdomain --nisserver ournisserver A shadow file is created with no root password (root:x:...) -- shadow passwords not enabled (no rootpw) https://launchpad.net/bugs/48918 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs