Multi-user screen sharing was advertised as one of the new features in OS X Lion. My college is running Lion on an Xserve server for a couple of our classes, and I administer this server.
We have been trying to have students connect to the Mac server using various Windows VNC clients, mainly Terminals, but also tried UltraVNC and TightVNC. We are having a lot of issues; the clients will freeze and/or fail to connect, and most disturbingly, remotely connected users' displays will show on the physical display, and subsequent connections will connect to that user's display instead of a new virtual one, allowing a user to effectively spy on another's session without their knowledge.
Interestingly, one of our students who was using the native Screen Sharing client in Snow Leopard was also unable to connect to the server.
We think it might be a problem with our wireless network, but if we do things like rebooting the server or having only one user connect at a time, it seems to work for a while.
What clients are explicitly known to work with Lion's implementation of VNC (I know it's somewhat non-standard), and how can we completely disable connecting to the physical display so that remote connections ALWAYS connect to a new virtual display, preventing the aforementioned security issue?
I believe you need to use the Lion screen sharing client, connecting to a Lion server, in order to use multi-user screen sharing.
Connecting via straight VNC will still connect you to the console. The multiple-user bit is a feature of the screen sharing software, not the VNC protocol.
Since the list of clients that specifically support it is constantly changing right now, I'll give a more generic answer...
You need a VNC client that allows you to specify not only a password, but also a username. If you're using a client that only asks for a password, you'll possibly get as far as the Lion login screen, but are likely to have problems getting much further. If your client lets you specify username and password, you should enter the appropriate username and password for the Lion server you're connecting to.