After yesterdays system update (which also updated some x-server components from what i remember) I had the same problem. System would boot into terminal.
startx command gave me almost the same error:
So i figured it must be because of then latest nvidia drivers I installed directly from nvidias website some time ago.
Removing and then installing nvidia-current package solved this:
On the side note I had to boot into my Windows 7 partition to google this solution, a system that has never failed me. On the other hand I've had about a dozen problems with ubuntu 12.04 x64 since i got it 2 months ago. Often something would stop working for no apparent reason or after a system update and I have to google a fix. The only reason I havent send this system back to where it came from yet is because I like learning it. Go figure O_o
sudo apt-get remove nvidia-current
sudo apt-get install nvidia-current