I have the same problem using the nvidia driver (actually nvidia-96)
with a GeForce3 card and a recent installation of Ubuntu 12.04.  While
booting up, the grub menu works fine, but after that, the screen goes
blank with just a cursor.  The lightdm login screen comes up with less
than full resolution, but that's no big deal.  The X session itself
works fine.  However, the tty 1-6 screens are blank with just a cursor,
just like the boot console screen.  I have a second 12.04 installation
on another partition of the same hardware, which was upgraded from
previous versions of Ubuntu.  Booting from this partition, I have the
same problem, except that the console and tty 1-6 show a low resolution
screen with just black and white stripes and blocks, just like the
original poster described, instead of blank with just a cursor.  I have
no idea when the problem started, because I had been using the nouveau
driver for a year or two before now.  However, that driver started to
have its own problems recently too.

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You received this bug notification because you are a member of Desktop
Packages, which is subscribed to nvidia-graphics-drivers in Ubuntu.
https://bugs.launchpad.net/bugs/953919

Title:
  corrupt boot splash and terminal console with nvidia driver

Status in “nvidia-graphics-drivers” package in Ubuntu:
  Confirmed

Bug description:
  The following occurs more or less the same in ubuntu 11.04, 11.10 and 12.04 
beta1
  I have an GeForce 7300 LE card driving a 22" 1680x1050 using DVI connection 
on a Dell E521
  After install, the nouveau drivers work fine. After activating the default 
"Recommended" nvidia driver the result is:-
  Boot splash: Black and white blocks across the screen
  Login and desktop: Normal
  Ctrl+Alt+F1 etc, random coloured pixels.
  Ctrl_Alt+F7, blank for several seconds then a desktop with corrupted (random 
pixels) untity bar and status bar. Using the mouse to force a repaint returns 
to a normal desktop.

  Using the "post-install" driver
  Boot splash: Black and white blocks across the screen
  Login and desktop: Normal
  Ctrl+Alt+F1 etc, blank screen.
  Ctrl_Alt+F7, blank for several seconds then a desktop with corrupted (random 
pixels) untity bar and status bar. Using the mouse to force a repaint returns 
to a normal desktop.

  Removing the nvidia drivers (back to nouveau)
  Boot splash: Black and white blocks across the screen
  Login and desktop: 1024x768 fuzzy distorted screen.
  The display settings cannot detect the monitor, and the only options are 
1024x768 or 800x600

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