This is what I have learned from my experiences with sme ldap:
To authenticate with LDAP you would require the user passwords to be incorporated within ldap, as users are already maintained in the tree.
LDAP, as most (all?) modules in sme, is a separate package which therefor can be changed to incorporate such actions. The tricky part would be getting the password once it's entered by the user...and doing that secure.
Aside from that, there are a number of methods in the ldap module, which IMHO could be done better (can't it always?).
I still need to get into this for another project, so I'll let you all know if I get anywhere with it.
Please don't expect anything fast though..