I have the same problem.  ASUS P5N7A-VM MOBO with 8500GT vid card using "hybrid 
SLI."  
I was first using the default driver, but I wanted a little more performance.  
The current nvidia driver worked fine right after installation.  Today I 
started getting notice upon boot that I was running in "low graphics mode," and 
I could sometimes get X to load correctly if I rebooted a few times.  I removed 
the current nvidia driver and rebooted.  That's when the really crippling 
behavior started.  I would see some text about the nouvea driver echoed on the 
screen, and then the boot process would halt with the machine hard-locked.  In 
the BIOS, I disabled the PCI-E 8500GT and was able to make the machine boot.  I 
tried different combos of BIOS settings (PCI-E card off and on) and drivers 
(173, current, and via running the script for the nividia installer).  The best 
results that I had was a machine that would use the nvidia driver but would 
hard lock any time that I tried to stop gdm (logout, reboot, shutdown, gdm 
stop, etc).  
I have now physically removed my second video card, removed all of the drivers, 
reinstalled the current nvidia driver from the repos, and everything is working 
well with one card.

-- 
nvidia-current 195.36.15 + kernel 2.6.32 + dual cards crashes system
https://bugs.launchpad.net/bugs/573557
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which is subscribed to nvidia-graphics-drivers in ubuntu.

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