I can confirm this also. I reformatted and did a clean install from the
most recent .iso. Even with the raw, unaltered install, Terminal crashes
gdm and sends me back to the login. Also, I cannot bring up a text
console on any other tty via ctrl+alt+(function key). I get a blank
black screen with a blinking underscore cursor.

Hitting alt+f2 to bring up "run" and them launching xterm works, but
typing "xfce4-terminal" has the same effect.

I am running an S3 card as well.  It appears to be an Xfce problem, and
switching to 16 bit is not acceptable, so I am going to switch to
another distro until this driver gets sorted out.

-- 
i810 + xorg = xfce crashes when opening terminal
https://bugs.launchpad.net/bugs/91849
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