This is a known issue. If you have >= 4GB RAM, you _currently_ have two
options to get a working desktop:

1. Use a regular x86 kernel, a la the -generic flavor. This has no PAE, so 
you're limited to about 3GB of mappable system memory.
2. Use an x86_64 kernel.

The linux-server kernel is currently a big "no-no" for Jaunty if you
have Intel graphics. Check the upstream bug report for status.

** Bug watch added: freedesktop.org Bugzilla #17993
   https://bugs.freedesktop.org/show_bug.cgi?id=17993

** Also affects: xserver-xorg-video-intel via
   https://bugs.freedesktop.org/show_bug.cgi?id=17993
   Importance: Unknown
       Status: Unknown

-- 
[i965] xorg on intel freezes on startup when using a kernel with 
CONFIG_HIGHMEM64G and AccelMethod is set to UXA 
https://bugs.launchpad.net/bugs/322356
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