This article is from the Frequently Asked Questions for Linux, the Free/Open Source UNIX-like operating system kernel that runs on many modern computer systems. Maintained by David C. Merrill with numerous contributions by others. (v1.0).
A: You probably have the same problem as in Why Won't Some Programs (e.g., xdm) Allow Logins?, with an added wrinkle.
If you are using shadow passwords, you should put a letter x or an asterisk in the password field of /etc/passwd for each account, so that if a program doesn't know about the shadow passwords it won't think it's a passwordless account and let anyone in.