First of all, I have a 64 bit Ubuntu 10.04 Lucid Lynx system, with PPAs for Thunderbird and Firefox to keep them up to date.
I also update my nVidia driver when a new one comes out; currently 295.20 which came out on 2012.02.13.
Other than that it is generic.

Yesterday I got several updates I can't recall all of them but I know xorg-server was in the mix. I subscribe to the Lucid Lynx email updates so I am aware of what is coming.
Got the updates, rebooted, compiz and cairo-dock were broken. Compiz was not even running and cairo-dock was just a box that looked like my login wallpaper.
When I entered compiz --replace in terminal, it hung the system and I could only press the reset button on the PC.
SCSM looked fine.

Thinking it had something to do with the nVidia driver, I tried to reinstall the two kernels as I had gone by this tutorial to install the driver when a new kernel was installed:

HOWTO: Automatically update manually installed NVidia drivers after kernel updates

That did not work. Nothing changed. I even deleted the /lib/modules/2.6.32-38-generic folder after removing that kernel because it would not delete it as the nVidea driver was in there.
This forced the driver to be re-installed into the kernel. This still did not solve the problem.

So, after googling for a solution and not finding any, I decided to re-download the driver and install it again via this webpage which I have always used:

Instructions on how to install nVida driver in Lucid Lynx 10.04.

This finally fixed the problem. I will have to perform the steps in the 1st HOWTO mentioned above as I think the previous driver is corrupt.

I will mark this as resolved but, I wanted to throw this out there in case there are others with the same problem.