I think the problem is with the "ati" device driver. If I manually edit
Xorg.conf to use the "vesa" driver isntead, I get to a login screen and
after that a working desktop. But if I change it back to the driver
"ati" the aforementioned symptom appears again.

Also, I can see that my Xorg.conf file is almost empty when I edit it
for the first time from the console I get to by pressing Alt+F1. I've
attached it here. But all it really contains is this:

Section "Device"
        Identifier      "Configured Video Device"
EndSection

Section "Monitor"
        Identifier      "Configured Monitor"
EndSection

Section "Screen"
        Identifier      "Default Screen"
        Monitor         "Configured Monitor"
        Device          "Configured Video Device"
EndSection

** Attachment added: "xorg.conf"
   http://launchpadlibrarian.net/17791591/xorg.conf

-- 
Intrepid Alpha 6 Live CD: Monitor goes into standby when X is started
https://bugs.launchpad.net/bugs/272623
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