I still have this problem with the latest live-usb, from 2012-09-09. This presumably incorporates any updates that I installed on the previous live-usb from a couple days ago, so what must've fixed it for me (i.e., not having to use "nomodeset" any more) was the installation of the nvidia blob.
I forgot to mention earlier, when booting normally (nomodeset left unset), the Xubuntu splash screen with the progress indicator comes up normally. Eventually it stops throbbing, and after a little while the screen switches to corruption.
I still have this problem with the latest live-usb, from 2012-09-09. This presumably incorporates any updates that I installed on the previous live-usb from a couple days ago, so what must've fixed it for me (i.e., not having to use "nomodeset" any more) was the installation of the nvidia blob.
I forgot to mention earlier, when booting normally (nomodeset left unset), the Xubuntu splash screen with the progress indicator comes up normally. Eventually it stops throbbing, and after a little while the screen switches to corruption.