Actually, it looks like this which got fixed just after 2.6.37-rc2
released

http://git.kernel.org/?p=linux/kernel/git/torvalds/linux-2.6.git;a=commit;h=8c05cd08a7504b855c265263e84af61aabafa329

As a temporary workaround you can boot into the 2.6.37-4 kernel which is
based on -rc1 until the -rc3 one is released

** Package changed: xorg-server (Ubuntu) => linux (Ubuntu)

** Changed in: linux (Ubuntu)
       Status: New => Triaged

** Changed in: linux (Ubuntu)
     Assignee: (unassigned) => Robert Hooker (sarvatt)

-- 
X11 (xorg) fails to start in natty on vmware
https://bugs.launchpad.net/bugs/676759
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which is subscribed to xorg-server in ubuntu.

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