I just encountered it again in Hardy but I also was having a crash issue
with gdm. I ran gdm-setup the first time out of XFCE and gdm segfaulted
dropping me back to a VT. I restarted gdm and tried again. After
selecting Happy Gnome with Browser and logging out, gdm died again and
didn't restart. I launched gdm again and got a different login screen
("Happy Gnome" I think). After loading up XFCE again and checking gdm-
setup, it had switched to "Random from Selected". After setting it back
to "Selected Only" and HG w/B, it retained the setting upon the next
login. I didn't have any additional gdm crashes after that even though
I tried to reproduce them.
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Installing a gdm theme changes "Selected Only" to "Random from Selected"
https://bugs.launchpad.net/bugs/122213
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