[jaikumarm]

Okay looks like I got lucky.. here's what I did to fix the first time login failure..

edit the product-ldap_auth-1.5.xml either in notepad and reimport or edit the plugin in admin panel->plugin manager

Find:

 
} else {
  $newuserid = $newuser->save();

at the very end of the product xml file

Add:

verify_authentication($vbulletin->GPC['vb_login_username'], $vbulletin->GPC['vb_login_password'], $vbulletin->GPC['vb_login_md5password'], $vbulletin->GPC['vb_login_md5password_utf'], $vbulletin->GPC['cookieuser'], true);
  exec_unstrike_user($vbulletin->GPC['vb_login_username']);
  process_new_login($vbulletin->GPC['logintype'], $vbulletin->GPC['cookieuser'], $vbulletin->GPC['cssprefs']);
  do_login_redirect();

This is basically the std login code for vb. I have just ended up re-logging the user with the login credentials provided earlier.

So here is the quick retrace of steps.
Installation
1. Add the command define('DISABLE_PASSWORD_CLEARING', 1); to your includes/config.php - This will NOT be overwritten by upgrades, so only needs doing once.
2. Upload the file hooks_ldap_auth.xml to includes/xml under your forum.
3a. Edit product-ldap_auth-1.5.xml with the changes as above
3b. Install the modified product file using the Add/Import Product link on the Manage Products page under Plugins & Products in your AdminCP.
4. Edit LDAP Authentication Options and fill in your ldap details
5. Done.