Good Morning:

When you make a fresh install of SL 5.4 you cannot make the login directory 
other than $home/user.
I tried this 3 times and l keep a careful set of notes on all systems.
The first system is a 64 bit dual core athelon - After a few days you can now 
create a user account in something other than /home.

Two more systems.
1.  When this system was loaded,  you could not setup a user in anything 
but /home.   A day later you could set up a user anywhere as we used to.  It 
was left connected to the network.
2.  When this system was loaded, you could not setup a user in anything 
but /home..   It was unplugged from the network,  you could not make a user 
account in anything but /home.

Guess:
Once all system were left on the network something got updated over night to 
fix the problem.
There are several bugs on BugZilla that are complaining about the same thing.  
The story is that the input login code was rewritten and botched but later 
fixed.   The current downloadeble .iso disks do not have the fix in place.

I don't know where the update log is but it should tell the story of how this 
problem goes away in the middle of the night.  Any clues.

Fix:  Install SL 5.4, do not create a user account, log in as root, update the 
system and the problem should be fixed.   I have wasted a lot of time 
debugging this and almost jumped ship.  Someone need to verify this process 
to see if it fixes the problem.

Conclusion:
Over all SL 5.4 is very good and everything we have tried works.

Thank You for your nice work     you-all.   Used to live in south.  :)

Larry Linder