Comment 1 for bug 84348

Same problem here (Edgy Eft Amd64).
It happened because I have the nvidia proprietary drivers installed (this is why proprietary drivers are bad:))

To solve the problem, do the following:

After your PC runs into the blue "X problem" screen, press Ctrl-Alt-F1 to go to the console in text mode.
In the console, login, then type:
sudo apt-get installlinux-restricted-modules-2.6.17-11-generic
Reboot.

Or, if you don't like to use the console and type commands do the following:

When the PC start you have the choice to boot:
Ubunt, kernel 2.6.17-11-generic
Ubuntu, kernel 2.6.17-10-generic
Choose kernel 2.6.17-10-generic, the PC will start normally.
Log in and start Synaptic (System > Administration > Synaptic Package Manager)
Search "nvidia"
You will find:
linux-restricted-modules-2.6.17-10-generic, that is installed
and
linux-restricted-modules-2.6.17-11-generic that is not installed

Mark linux-restricted-modules-2.6.17-11-generic for installation and press Apply.
Reboot.

It seems this update should have been installed at the same time than the kernel 2.6.17-11.1 update, but wasn't.