I also am having this bug. On the 7.10 live cd I am getting it as well
as on my installed OS. I am using an Nvidia 8600 GT with nvidia 100.14.X
drivers installed via Envy.

I have two displays hooked up, each is 1280x1024. I tried updating
/etc/usplash.conf to 1024x768, 800x600, and 640x480 and then using
update-initramfs and each time the startup produced the same behavior.
Grub loads and then a few lines of text and when it comes time to load
the initrd it fails and I end up with a blank screen until kdm starts
up. I have noticed that most people affected by this are on laptops, I
however am not.

brettalton:
I tried your method and got basically nothing the diff output was basically 
that I used startupmanager to manually select 1280x1024 (vga=795). I'm going to 
try a few more things and play around with your suggestion at various 
resolutions to see if I can get any meaningful output to help troubleshoot 
this. Is there any sort of logfile specifically for initrd stuffs?

-- 
Black screen, and bad usplash.conf
https://bugs.launchpad.net/bugs/150930
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