We recently ran into problems with our LDAP server, and tried to disable Jenkins security by setting the 'useSecurity' tag to false in config.xml file.

We have restarted Jenkins multiple times to no avail, security will not be disabled regardless of the setting in config.xml.

Others have had similar experiences:
http://groups.google.com/group/jenkinsci-users/browse_thread/thread/2193f8f1f5a48749/33c58bb7d9dfb6f3