Good news!

The problem has disappeared after using today's (21 sept 2009) Live
Build from http://cdimage.ubuntu.com/daily-live/current/

With this build I can get to the desktop with no problem. Everything
looks fine, though I haven't installed it, just used the Live CD.

Juan, Tormod, I unfortunately didn't try out your solutions.


Thanks for the fix whoever did it!

-- 
Karmic Koala Alpha 5. Desktop does not start, freezes the boot screen
https://bugs.launchpad.net/bugs/428365
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