Also affecting me. The following points may be of interest:

1. Graphics: NVIDIA GeForce G210M with 512MB DDR Dedicated Memory.
2. Machine: Lenovo G550 NTDF3UK (Laptop)
3. Previously I upgraded (on the standard driver) from 11.10 to 12.04 and this 
issue did not occur.
4. I erased and reinstalled my entire OS (for fun) and then the issue started. 
I have tried with the default driver and also with the proprietary driver in 
'Additional Drivers' and both exhibit the same issue.
5. If I keep rebooting my machine it eventually recovers and logs me into the 
desktop. Sometime it logs me in first time, other times it takes around2-3 
reboots and then it is fine again until the next time.
6. I've attached my output from SysInfo in case anything in there is of 
interest (GM_SysInfo).

Does anyone know a timeline for this fix because this is really spoiling
what is an excellent Ubuntu release and it is incredibly tedious to keep
rebooting to get to a desktop (I don't know of a 'smarter' way to start
the desktop (running startx from within low graphics mode does not
invoke the launcher or the panel).

** Attachment added: "GM_SysInfo"
   
https://bugs.launchpad.net/ubuntu/+source/jockey/+bug/912381/+attachment/3126050/+files/GM_SysInfo

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https://bugs.launchpad.net/bugs/912381

Title:
  Error "ubuntu is running in low-graphics mode" directly after
  installation

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