This feature works as expected on Windows XP. But it does not appear to have any effect in Windows 7. The problem has been duplicated using the "uid" attribute and the the "cn" attribute.
For example, on Windows 7, the login Credential Provider shows "cn=user1,ou=Users,o=NTS". On a similarly configured XP workstation, the login GINA displays "user1" as expected.
STEPS TO DUPLICATE:
After following these steps, note that the Credential Provider username field shows the complete LDAP formatted FDN(e.g. "cn=user1,ou=Users,o=NTS"). The Credential Provider username field should show only the attribute specified (e.g. "user1").
This configuration works perfectly on Windows XP workstations.