Comment 35 for bug 351293

Hello, I am having the identical problem described here. I will add additional information/clues that may be helpful.

I have an older computer at home that I recently did a fresh install of Xubuntu 9.04 on, and it did not have any of these problems. I have applied all apt-get upgrade's since then also with no problems.

Today I've begun a fresh install at my work computer, which is a Dell Dimension 9150 with onboard ATI video card. Per my notes from the Gutsy Xubuntu install, the video string is identified as this:
Radeon X300/X550/X1050 Series

Under Gutsy, I used the ATI proprietary driver because of problems with the default provided mesa drivers. But during initial testing of the Januty Xubuntu LiveCD, I did not have any problems at all and had planned to not install the proprietary driver.

So the install went like this (to reiterate what others have said):
1. Fresh install from Xubuntu Jaunty LiveCD
2. After install, everything is fine, works great
3. I first checked /etc/apt/sources.list and uncommented the Canonical partner repos
3a. then did "apt-get update" and "apt-get upgrade"
4. While updates were running, I also setup Pidgin for my Jabber network and added it to the autostart apps under Settings->Session and Startup
5. After updates completed, I did a full reboot
6. Screen comes up to a pale blue background with mouse, but no other XFCE desktop. Also, Pidgin window pops up and works fine.

Other things that work:
CTRL-ALT F1, F2, F3, etc
CTRL-ALT-DELETE locks screensaver and lets me "switch user", but after logging back in I just get the pale blue screen again

One thing I will try is to apply the ATI Proprietary drivers at this stage and report back. I can do this by downloading them onto my USB stick then using commandline to launch then. I may need to add the terminal app to my autostart applications so when I get the pale screen I have a way to navigate and launch the driver installer GUI.