I also had some bizarre behaviour last night after an update on a potato machine. Unlike your situation, everything boots fine and I can log in on X, but I only get a console. After poking around for a little while I figure that the problem is probably a switch to use the x-window-manager utility and the fact that my default window manager (afterstep) is not listed in my alternatives directory. Can anyone confirm that the switch was made? I was always getting a message saying that the old utility was about to become obsolete...is this now the case? ..and/or are these two problems related?
Cheers, Paul

