1. I have the same problem, and am running a dual-head config (fglrx).

2. I copied the /home partition from an Ubuntu Hardy meets the creature from 
Intrepid Alphas 
    onto this fresh Ubuntu 8.10 release install.

3. I don't much care about the guest stuff, but wanted to switch users.
That also crashes.

Output from above command is:
  sudo sh -ex /usr/share/gdm/guest-session/guest-session-setup.sh

+ USER=guest
+ PWSTAT=guest P 11/03/2008 0 99999 7 -1
+ echo guest P 11/03/2008 0 99999 7 -1
+ cut -f2 -d 
+ [ P != L ]
+ echo User account guest already exists and is not locked
User account guest already exists and is not locked
+ exit 1

I am going to delete the guest account (via 
System/Administration/UsersAndGroups) and
readd it the same way, to see if that helps or not.

-- 
Black screen after clicking to start a Guest Session
https://bugs.launchpad.net/bugs/266911
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