I'm experiencing the same issue on both a desktop install of 8.04 LTS
and a laptop install of 8.04 LTS (neither are server installs though).

This issue began today ( 3-13-08 ) after downloading both the SSH
security updates and Gnome updates. Since then, I cannot shutdown either
machine from the CLI by using "sudo shutdown now". I am able to use
"sudo shutdown -h now" to successfully shut down the machine from a
terminal. Running "sudo restart now" works as it should. Selecting both
"Shutdown" and "Restart" from the Gnome "Quit..." menu works properly.

But if I attempt to invoke the "sudo shutdown now" command from a
terminal, it takes me to the blue screen "Recovery Menu".

-- 
Shutting my system down drops to a X error menu
https://bugs.launchpad.net/bugs/216006
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