Install wdm, dpkg-reconfigure gdm, select wdm as your default. Talk to
me offline keith at ksmith.com as this is not in scope. You are having
a problem with Xnest which may have nothing to do with the display
manager. You can determine that trivially by running another X session
against the dm. If you don't understand how this works this is a bug
trac for gdm, not a help forum, we shouldn't be discussing this here
beyond the scope of work arounds.
Install wdm, dpkg-reconfigure gdm, select wdm as your default. Talk to
me offline keith at ksmith.com as this is not in scope. You are having
a problem with Xnest which may have nothing to do with the display
manager. You can determine that trivially by running another X session
against the dm. If you don't understand how this works this is a bug
trac for gdm, not a help forum, we shouldn't be discussing this here
beyond the scope of work arounds.