I've disabled X on startup (kdm in my case). Then after boot I manually run 
kdm, and stuff looks fine now.
I tend to suspect that the X (kdm/gdm/whatever) init script conflicts with some 
other init script, but if it's being run later, the bug doesn't show.

-- 
kernel 2.6.24-16-generic + radeon driver = system freezes
https://bugs.launchpad.net/bugs/220345
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