Ubuntu Blog:

Multiple Graphical Users Logged in at the Same Time January 23, 2006

There are several ways to share the same desktop between family members. But it gets tricky when you have, say a graphical program running that has to keep running, and your sister wants to use the computer. In this situation, it is useful to have more than one graphical session running. Your work will continue uniterrupted even as your sister can use the desktop.

The simplest way of doing this is by starting gdmflexiserver
$gdmflexiserver

This will start a new graphical server which you can switch to by using Ctrl+Alt+F8. You can return to your own graphical session using Ctrl+Alt+F7. You can create more such sessions - you get the idea.

Ideally, FUSA should be in Ubuntu already - but since it is not, you can install it and use it. Being beta software, it might be buggy, and I’d rather just do this using gdmflexiserver - but if you are adventurous, please do try out FUSA — it is a lot easier to use, as the website will tell you.