Same Problem here. Everything works until kdm tries to start. My graphic
hardware is an intel GMA 945 (Mobile 945GM/GMS, 943/940GML) too. I tried
the linux-image-2.6.24-19-xen. The screen goes blank. And nothing
happened until I press Strg+Alt+Entf, then two of the keyboard leds
starts blinking periodically.

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X does not work in Xen, causes crash
https://bugs.launchpad.net/bugs/68440
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