We've had some issues where we failed to initialise the session directory properly. This currently results in weird behaviours, like the client saying that the VNC password is wrong (caused by lack of a password file for Xvnc).
We should probably detect that we cannot initialise the session information as we are creating it and abort the session. This will give more obvious feedback that we cannot start sessions properly.
This also happens if /var is out of disk space. Happened on tl.cendio.se today.
Fairly sure this got fixed in bug 7302.