I have the same problem on two laptops both having intel chipset graphics. I 
can get a running
X-server by adding the kernel option nomodeset (which should have the same 
result as setting i915.modeset=0). 

If I use kdm as the login manager I also get a low resolution warning.
If I select to exit to the console login and enter 'sudo initctl restart
kdm' than kdm starts up normal and with the intel device. If I use gdm
as the login manager then the X-server works normal. (Probably a problem
with the upstart scripts?). In any case I have to use 'nomodeset'.

This problem occured after the update and was not there, when I upgraded
to Karmic.

-- 
[965gm] xorg update results in blank screen on boot
https://bugs.launchpad.net/bugs/491856
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which is subscribed to xserver-xorg-video-intel in ubuntu.

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