Given that a reboot fixed the problem, what you missed is that you needed to tell the login manager (gdm) to reload its configuration. Most system services do not reload their configuration when you change it, in fact few applications automatically reload their configuration files if you edit the file directly (as opposed to going through that application's configuration UI).
In the case of Gdm, it doesn't have a command to reload its configuration file. All you can do is restart it; that doesn't happen automatically when you log out (it's still the same instance of gdm until you stop it).
The usual way to restart a system service is to run something like one of the following commands (I forget which service manager your version of Red Hat uses):
service ssh restart
However, restarting gdm logs out all users that logged in through it, so it's generally not desirable. Instead, run gdm-safe-restart so that gdm will restart as soon as the last user logs out. (This doesn't work on some versions/installations of gdm, notably on Ubuntu 10.04.)