Public bug reported:

It seems that someone else has also run into this problem.

http://ubuntuforums.org/showthread.php?p=3553500#post3553500

After upgrading Feisty to Gutsy beta, xserver would fail to hand off to gnome 
after logging into gdm.  To reproduce:
1. reboot machine or ctrl-alt-backspace
2. login to machine through gdm
3. see gnome mouse circle but never see the gnome loading icons

To fix it I had to:
1. /etc/init.d/gdm stop
2. startx (which started gnome without a problem)
3. Under gnome, I was instructed to touch ~/.config/xserver-xgl/disable
4. Next time I rebooted everything worked as expected

** Affects: ubuntu
     Importance: Undecided
         Status: New

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[gutsy] xserver fails to hand off to gnome after logging into gdm
https://bugs.launchpad.net/bugs/153776
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