login_destination_admin_settings_validate() doesn't conform to E_NOTICE in PHP 5.3. Rather than using $x .= $y inside a loop on an (initially) undefined variable, the code should first initialise the variable.
I have attached a patch. It seems that the code doesn't conform to Drupal coding standards (http://drupal.org/coding-standards#indenting) and my IDE has stripped out a lot of trailing whitespace, so I'm afraid the patch looks a lot more complicated than it is.
You could just choose to reject the patch and add...
$warn_vars = '';
...immediately inside the login_destination_admin_settings_validate() function, since that's all that's changed.