same problem here doing a fresh install on a IBM X40 (gutsy alternate rc iso, booting from usb using hd-media from "[..]/current/[..]/hd-media"):
installation goes fine till xorg is installed (textmode terminal), then the terminal switches to graphics-mode and these colorized unreadable blocks are displayed (the before posted screenshot shows it).
same problem here doing a fresh install on a IBM X40 (gutsy alternate rc iso, booting from usb using hd-media from "[..]/current/ [..]/hd- media") :
installation goes fine till xorg is installed (textmode terminal), then the terminal switches to graphics-mode and these colorized unreadable blocks are displayed (the before posted screenshot shows it).
this is a showstopper!