I've got an account on a server that supports GSSAPI (Kerberos 5) authentication, but also accepts passwords. After updating from 1.1.x to 1.2b5, it still insists on me entering a password. According to the log:
16:23:12: (Libpurple: util) Writing file /Users/raeburn/Library/Application Support/Adium 2.0/Users/Default/libpurple/blist.xml
16:24:01: <ESPurpleJabberAccount:840a990 11>:raeburn@mit.edu: Updating status for key: Online
16:24:01: <ESPurpleJabberAccount:840a990 11>:raeburn@mit.edu: Updating status for key: StatusState
[ ... THIS is when it prompts me for my password, without having even connected yet ... ]
16:24:09: <ESPurpleJabberAccount:840a990 11>:raeburn@mit.edu: Updating status for key: User Icon
16:24:09: Adium: Connect: raeburn@mit.edu initiating connection using status state <AIStatus: 5f6320 [Available]> ((null)).
[ ... later ... ]
16:24:10: (Libpurple: jabber) Recv (410): <?xml version='1.0' encoding='UTF-8'?><stream:stream xmlns:stream="http://etherx.jabber.org/streams" xmlns="jabber:client" from="mit.edu" id="28ce58f8" xml:lang="en" version="1.0"><stream:features><starttls xmlns="urn:ietf:params:xml:ns:xmpp-tls"><required/></starttls><mechanisms xmlns="urn:ietf:params:xml:ns:xmpp-sasl"><mechanism>GSSAPI</mechanism><mechanism>PLAIN</mechanism></mechanisms></stream:features>
If I hit "cancel" or "OK" (without a password) at the password prompt, it stops trying to log me in. If I enter an incorrect password, my login attempt fails. I don't see an option in the GUI for "(don't) require password" or "use SASL (or GSSAPI)".
I've also tried creating a new account on my machine, launching Adium in it as a new user, and connecting to my Jabber account, with no better results.