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my /etc/sysconfig/displaymanager has DISPLAYMANAGER_KDM_THEME=""
I had restarted X and also completely rebooted. I still get that new full screen blue login display.
I have also gone into the KDE control panel as administrator and set up the kdm behavior there. I set an alternate backdrop for kdm, and for a moment it does appear on the screen before the blue screen appears.
I found another post about this general subject and a writer stated that manually running SuSEconfig was required to update /etc/opt/kde3/share/config/kdm files. I ran it manually and it coughed up more verbose information including:
ATTENTION: You have modified /etc/opt/kde3/share/config/kdm/kdmrc. Leaving it untouched...
Well I don't recall editing that myself, so I assume the KDE control panel for kdm manipulated that file.
In that file I found a line:
Theme=/opt/kde3/share/apps/kdm/themes/SUSE
I changed it to
Theme=
And the old panel now appears.
Battling config tools. I confirmed this with a new install today (not an update). If the /etc/sysconfig editor is used FIRST to clear out the DISPLAYMANAGER_KDM_THEME setting there, then it all works and kdm uses the standard grey login box. Later the KDE control panel can be used to customize the kdm logon dialog. But, mess with the KDE control panel for the kdm dialog first and it will alter the /etc/opt/kde3/share/config/kdm/kdmrc file, so SuSEconfig will then refuse to update the theme setting.