I have a server that has slapd running, I have populated it with users,password, etc.

I have configured another machine to query the ldap database users.
so if try to ssh to the ssh machine i get the following

[root@machine1 etc]#ssh -l tom 10.0.0.2
tom@10.0.0.2's password: #I type in wrong password.
Permission denied, please try again.
tom@10.0.0.2's password: # I type in right password
Connection closed by 10.0.0.2

Thus this tells me that the authentication is taking place, but something after the authentication is throwing me out.

I have the following /etc/pam.d/ssh file on the ssh server machine...

#%PAM-1.0
auth required pam_nologin.so
auth sufficient pam_ldap.so
auth required pam_pwdb.so shadow nodelay
account sufficient pam_ldap.so
account required pam_pwdb.so
password required pam_cracklib.so
password required pam_pwdb.so shadow nullok use_authtok
session required pam_mkhomedir.so skel=/etc/skel/ umask=0022
session required pam_pwdb.so

I do have another problem as well, that might be related:
When I try and su to user "tom" it does not work with the pam_mkhomedir in the pam file...
For example:

[root@machine2 root]# su tom
Creating directory '/home/tom'.
could not open session

The /home/tom directory is not created.

I have the following /etc/pam.d/system_auth

auth required /lib/security/pam_env.so
auth sufficient /lib/security/pam_unix.so likeauth nullok
auth required /lib/security/pam_deny.so

account sufficient /lib/security/pam_succeed_if.so uid < 100
account required /lib/security/pam_unix.so

password requisite /lib/security/pam_cracklib.so retry=3
password sufficient /lib/security/pam_unix.so nullok use_authtok md5 shadow
password required /lib/security/pam_deny.so

session required /lib/security/pam_limits.so
session required /lib/security/pam_unix.so
session required /lib/security/pam_mkhomedir.so skel=/etc/skel/ umask=0022

When I comment out the pam_mkhomedir line, I can su to another user.

Any help would be erm... helpfull.
Kind Regards
Christiaan Ehlers

Please add "debug" statements to the PAM config lines and retry.
Then could you please post relevant log lines?
Usually that'll help ppl to help you.