I experience a similar bug.
I run VirtualBox with a Microsoft XP guest under Ubuntu 10.04 (Gnome). When I 
leave the machine idle, the screensaver will appear (no problem) then the 
monitor shuts off (as expected). Then inexplicably I get a dialogue "Ubuntu is 
in low graphic mode". The dialogue (reported above) appears; I have to shut 
down and restart the entire computer to restore operation. When this happens, 
all active applications are dismissed (tantamount to a complete system crash).
Workaround: do not leave the computer idle with the VirtualBox application 
visible. I originally thought this was a VirtualBox problem.
This crashing does not happen under Fedora 15 (Gnome), thus I conclude it has 
something to do with Ubuntu display driver.

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https://bugs.launchpad.net/bugs/577487

Title:
  display crashes leaving me in "low-resolution" mode

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