cd /etc/init
sudo mv failsafe-x.conf failsafe-x.conf-disable
cd /etc/init.d
sudo mv failsafe-x failsafe-x-disable


works for me -- ive been told that this is an issue related to kdm trying to 
start before video drivers are loaded: all credit for this workaround goes to 
doctordruidphd on ubuntuforums. see 
http://ubuntuforums.org/showthread.php?t=1343261&page=5

-- 
after recent update which included xorg, xserver etc causes low-graphics mode 
error at start
https://bugs.launchpad.net/bugs/491483
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