I have the same problem on my IBM Thinkpad T23. But it only happens with
_some_ kernels. For instance, I can repro the bevaviour with the new
2.6.33 kernel. 2.6.23.7 works (i.e. the boot process doesn't end with
the command prompt and I do not need to start gdm manually ), but only
with this additional line in rc.local:

/etc/init.d/gdm restart

I haven't seen this bevaviour with previous Ubuntu versions. But in
Karmic, both gdm and upstart have changed... as far as I am concerned
these changes have been introduced too quickly and need more testing
(not only because of this anomaly, there other additional ones, e.g. the
mount of my NFS network drive fails during boot).

Stefan

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gdm upstart script fails to start gdm
https://bugs.launchpad.net/bugs/430494
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