Are there any possible issues with using the default Forms Authentication (see below) on Load Balanced servers? If there can be, what can I do to prevent the issues.
<There is one issue. The cookies are encrypted and validated using the machine key and the validation key (that's what protection="All" means). You will have to set those in your top-level web.config in all the servers, otherwise each of them will have a different one and will reject cookies set by the others.
You can find a machineKey generator here. Then put the generated xml inside in the web.config of all the servers and you're ready to rock.