I found the solution on http://ubuntuforums.org/showthread.php?t=1640070

At /etc/pam.d/common-password

#

# /etc/pam.d/common-password - password-related modules common to all services

# -- removed comment header talking about various options --



# here are the per-package modules (the "Primary" block)

password    [success=2 default=ignore]  pam_unix.so obscure sha512

password    [success=1 user_unknown=ignore default=die] pam_ldap.so use_authtok try_first_pass

# here's the fallback if no module succeeds

password    requisite           pam_deny.so

# prime the stack with a positive return value if there isn't one already;

# this avoids us returning an error just because nothing sets a success code

# since the modules above will each just jump around

password    required            pam_permit.so

# and here are more per-package modules (the "Additional" block)

password    optional    pam_gnome_keyring.so 

# end of pam-auth-update config

Try removing the use_authtok parameter and save the file. You may need to restart.

-Tim

It works! Tee hee