I was installing Ubuntu at a friends computer today. He wanted to use the computer with out the login/password prompt as it was a home PC . I did the following steps to achieve this.
Click on System ->Administration-Login Window.
You will get a screen like this.
Click on security and check the enable automatic login check box.
Select the user name a automatic log in.
The login preferences window offers several other options. For example, you can setup timed logins. This will allow you to login using user name and password with in a specified time.If you don't do this the user name specified will be automatically logged.
Also, if you are enabling the system administrator account "root" , you can allow him to login to the GUI by ticking the appropriate option.