Description of problem: I have two regular (non root) users defined and an admin user too. I am loged in as the admin user. If I try to su to the regular user su - genec I am prompted to see if I want to change the security context (defualt =y) but nothing entered seems to work. There are no alternate contexts defined for this user. If I use ssh to try and login from another system .. I get in, no prompts. Per Dan Walsh: "The ssh behavior is currect. The only time you should get prompted for security contexts is if the user has the ability to have more than one security context."
I had a similar problem, but perhaps worse (you don't mention whether you were able to log in directly as the two regular users). This was immediately after a fresh install of Core2 Test2 onto a clean partition. After doing the cd install (with permissive selinux chosen from the firewall screen) and rebooting, during "first boot" initialization gui dialogs I set up a new user account. However when I went to log in as that user I was unable to. Investigation revealed the user hadn't been created. No entry in /etc/passwd, no directory in /home. So I logged in as root and used the gui User admin tool to create the new user. This time the user was created. On trying to log in as that user I would get: via gdm: popup saying something like "executable context not allowed", click ok bombs me back to gdm. via console: same message you received (change security context, tried entering user_r/user_t, which wasn't accepted). via su (from root): same security context message didn't try ssh. Running: fixfiles relabel reboot fixed things for me.
Please try with latest Fedora Core.
I don't see such problems with FC3 and targeted selinux policy.