Hi again
I downloaded, burnt and ran Phinx-RC1 as suggested. It works fine. Oddly, on bootup it did drop down to a text only login TWICE, stayed there for 10 seconds or so, then went back to booting normally - is this what you'd expect?
Yes, it's normal that a liveCD/liveUSB is a little slower than a usual HDD installed system.
Interesting that your system works, that means there are no compatibility issue between your HW, the nvidia drivers, the new kernel.
Anyway, clearly that works on my system
Old-polack - I unistalled the kernels, rebooted and have started to install one at a time, with reboot in between, testing the new kernel. I get the same result - a failure and back to text mode. If I logon and type startx I always get an error of 'device not found, no screen present' or something along those lines. Clearly my graphics card is being recognised on boot with new kernels - as it always installs the nvidia 260 driver when being first run - but after that, when X starts, the graphics card can't be seen. 
Everything was fine before the last big update, and is still fine with the earlier kernel.
Most odd....
The nvidia dkms modules is rebuit upon reboot of a new kernel installation when the nvidia-dkms package is installed, this has nothing to do with hardware recognition, anyway, from your previous report about
lsmod, the nvidia module exist and it's loaded, therefore your card look like recognized.
When X server is started, a log file is created:
/var/log/Xorg.0.log, may be you want to take a look at this file for actually unknown errors (lines marked with
EE in the log). Additionally you may want to take a look at the output of
dmesg command for others info/errors.
Boot using the "broken" kernel, copy the file /var/log/Xorg.0.log in your home, execute
dmesg > ~/dmesg.txt, then reboot to your working kernel and eventually post here both output files.
AS
