Today's updates (for Sat 19.march.2011) fixed a lot of things.
I did:
$ sudo apt-get update 
$ sudo apt-get -y upgrade
$ sudo apt-get -y dist-upgrade 

I can now login and boot into the Unity desktop.

$ find  /lib/modules/ -type f -ls -iname '*.ko' | grep -E 
"/nvidia-current.ko|/nvidia-173.ko|/nvidia-96.ko|/fglrx.ko"
921607 13248 -rw-r--r--   1 root     root     13562440 Mar 19 11:18 
/lib/modules/2.6.38-7-generic/updates/dkms/nvidia-current.ko

$ grep -E "LoadModule:.*\"nvidia|fglrx\"" /var/log/Xorg.0.log 
[    23.586] (II) LoadModule: "nvidia"

However the Unity-desktop is very unstable.
Sometimes windows' titlebar/border disappears. This command brings it back
$ compiz --replace & 

ALT+TAB freezes the desktop.

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https://bugs.launchpad.net/bugs/737755

Title:
  Natty: Cannot boot with  proprietary NVIDIA driver for GeForce 8800
  GT.

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