Did you get a pass on everything when you setup Authentication? Is this the main portal or a child portal? I'm asking because the blank username almost sounds like a couple of things that I've seen (though I've never seen where it wouldn't allow you to manually login).

You may have to use impersonation to pull all the info from the AD (especially if you got any failures when you setup the authentication). In your web.config look for the line < identity impersonate="true" /> in a commented out section. Uncomment that line only and add the following userName="domain\username" password="password" to it so that it looks like this <identity impersonate="true" userName="domain\username" password="password" />. That user can be any generic domain account it doesn't have to have any admin privledges. The account you use though has to be givin the same rights on your DNN install as NETWORK SERVICE/ASPNET does.

If it's a child portal, there's a bug that's always existed in the provider and that I'm currently trying to fix it (without much luck so far).

The permissions need to be set on the actual directories themselves. If you go onto your webserver and go to where your DNN install, right-click on the parent directory (ie:c:\inetpub\dotnetnuke), go to the properties and click on it. Click on the Security tab and you should see NETWORK SERVICE and/or ASPNET. That's where you need to add the user you entered in the web.config.

Are those fields filled in when you look at a user's properties in the AD?

EDIT: Oops I hit reply sooner than I should have.

User's clicking logoff is a bad thing as it screws up the auto-login because of the cookies that get written. They'll have to delete the cookie to the site so that it'll log them back in again.

Also, on the incomplete user profiles (info incorrect in the database compared to what it should be). Are these accounts possibly from before things were working correctly (autologin)? You may have to delete the accounts as the only thing that's updated on an existing account is the password if it's changed and the security roles if synchronizing is turned on.