I am affected too. What I did is install ubuntu from the alternate cd
and then I started ubuntu from recovery mode. A prompt appeared asking
for the user/pass and, after installing the nvidia drivers, I typed
"sudo nvidia-xconfig" (which writes a valid xorg.conf under /etc/X11/
path). Restarted the PC and all loaded fine.

I know it doesn't solve this bug but its a workaround...

-- 
karmic beta live cd no display output (no X, no tty)
https://bugs.launchpad.net/bugs/444123
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