I started experiencing this today after applying the latest xserver
updates for Karmic (1:7.4+3ubuntu10).  If you cancel out of the low
graphic mode dialog quickly enough, kdm will restart and run normally.

The problem results in the following messages in the kdm.log file:

Fatal server error:
Server is already active for display 0
        If this server is no longer running, remove /tmp/.X0-lock
        and start again.


Please consult the The X.Org Foundation support 
         at http://wiki.x.org
 for help. 

 ddxSigGiveUp: Closing log
Warning:  Failsafe mode was already attempted within 30 seconds.
Warning:  Falling back to gdm to report the issue.

-- 
Karmic + KDM + NVidia = Can't boot (low graphic mode)
https://bugs.launchpad.net/bugs/485651
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which is subscribed to nvidia-graphics-drivers-180 in ubuntu.

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