A solution to this issue is posted on Ubuntu forums. 
 
See post titled "Stuck with black screen on booting after 10.04 upgrade" See 
comments #7, 8,9 and 10 especially. 
http://ubuntuforums.org/showthread.php?t=1467235


The solution people found is to boot into the older kernel, and then install a 
kernel that's even newer than the one that ships with the Lucid 10.04 iso. 
Seems everything works then.

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[855GM] GPU hang when an application tries to use XVideo
https://bugs.launchpad.net/bugs/554835
You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to xserver-xorg-video-intel in ubuntu.

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