I upgraded my iMac and MacBook Air to Lion over the weekend. The iMac, which previously did not require a password to get out of the screen saver, decided it now did, and the MacBook Air which previously did, decided that it wasn't going to do that anymore. All the settings looked correct, but I messed about a bit, changed them, came out, went back in, changed them back, and now both work as expected. The MacBook Air, however, is missing the checkbox which is next to this option on the iMac. As a result, this option can not be completely disabled on it. This isn't causing me a problem since its the Air that I want locked down. Just thought I'd post incase someone else is going mad trying to find the missing checkbox. So, if you are trying to turn this option off, and can't work out how, its probably because the checkbox isn't where it should be for some reason. Sorry, but I can't offer a solution.
On a more positive note: Unlike when I last set this option, it now asks for a password when waking the display from sleep as well as just from the screensaver so you can now disable to screensaver entirely and go straight to sleep monitor while still requiring a password.
On a more positive note: Unlike when I last set this option, it now asks for a password when waking the display from sleep as well as just from the screensaver so you can now disable to screensaver entirely and go straight to sleep monitor while still requiring a password.