I get exactly the same error, using nvidia-96 driver and having gdm theme installed (in my case it is xubuntu-gdm-theme). If you remove *-gdm-theme package it starts working.
But as it is, it makes xubuntu/ubuntu unusable for unexperienced user after they have installed nvidia drivers. So, in my opinion this is very important bug. It seems that this bug has appeared just recently with latest gdm update. -- Mouse and keyboard stop working after selecting user https://bugs.launchpad.net/bugs/553200 You received this bug notification because you are a member of Ubuntu Bugs, which is subscribed to Ubuntu. -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs
