Similar symptoms on my 7.04 desktop install are produced by remote
(Windows XP) logins from both Hummingbird Exceed or X-Win32 on 100% of
my attempts.

However, this bug thread provided a complete fix for me:

https://launchpad.net/ubuntu/+bug/89022

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gdm does not start properly herd 5
https://launchpad.net/bugs/93255

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