Public bug reported:

When I upgraded to gutsy I no longer had working nvidia drivers
installed. So upon reboot X server starts with the "Display settings
dialog" using lowest possible resolution. So far so good, but when I
tried choosing nvidia driver from the list and clicked ok X server
restarted with exact same dialog - in other words it didn't work. Same
thing happens with nv driver that should always at least give you
correct resolution. The most annoying thing though is the fact that I
cannot switch to any virtual consoles while X is running, so I cannot
install correct drivers. Well, the way to do it is to click cancel and
then quickly switch to another console while X is restarting and kill
gdm. It takes a while though because the time window you got while X is
restarting is pretty small :p.

** Affects: ubuntu
     Importance: Undecided
         Status: New

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[gutsy] gdm restarts X server over and over again if x server fails to start
https://bugs.launchpad.net/bugs/147220
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