I know there are a lot of posts about nvdia driver, but I am not able to solve this.
I updated my configuration yesterday, September 27th, and it seems that a new nvidia driver was involved. The updated completed with an error, and invited me to send a bug report automatically. I send it, but it finally said that there was no place to send the bug report to.
Today I updated again, and a new kernel was there. Then I rebooted. I found a desktop in 640x480 with a horrible, unreadable font.
I run jockey and tried to go back to another version of the nvidia driver, but it seems that none of the drivers listed there are suddenly valid. I have the x-swat repository enabled, because I remember that I had a similar issue in the past that was only to be solved with the newest driver.
jockey log:
2012-09-28 11:22:24,747 DEBUG: Selecting previously unselected package nvidia-173.
(Reading database ... 536311 files and directories currently installed.)
Unpacking nvidia-173 (from .../nvidia-173_173.14.35-0ubuntu0.2_i386.deb) ...
Processing triggers for man-db ...
Setting up nvidia-173 (173.14.35-0ubuntu0.2) ...
Loading new nvidia-173-173.14.35 DKMS files...
Building only for 3.2.0-32-generic-pae
Building for architecture i686
Building initial module for 3.2.0-32-generic-pae
Error! Bad return status for module build on kernel: 3.2.0-32-generic-pae (i686)
Consult /var/lib/dkms/nvidia-173/173.14.35/build/make.log for more information.
Processing triggers for bamfdaemon ...
Rebuilding /usr/share/applications/bamf.index...
2012-09-28 11:22:25,143 WARNING: modinfo for module nvidia_173 failed: ERROR: modinfo: could not find module nvidia_173
2012-09-28 11:22:25,143 ERROR: XorgDriverHandler.enable(): package or module not installed, aborting
2012-09-28 11:22:53,613 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:22:53,613 DEBUG: KMH enabled: False
2012-09-28 11:22:53,629 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:22:53,629 DEBUG: KMH enabled: False
2012-09-28 11:23:01,943 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:01,943 DEBUG: KMH enabled: False
2012-09-28 11:23:01,962 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:01,963 DEBUG: KMH enabled: False
2012-09-28 11:23:01,998 DEBUG: NVidia(nvidia_173_updates).enabled(): target_alt None current_alt /usr/lib/nvidia-173/ld.so.conf other target alt None other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:01,998 DEBUG: nvidia_173_updates is not the alternative in use
2012-09-28 11:23:02,044 DEBUG: NVidia(nvidia_current).enabled(): target_alt /usr/lib/nvidia-current/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-current/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,044 DEBUG: nvidia_current is not the alternative in use
2012-09-28 11:23:02,066 DEBUG: NVidia(nvidia_current).enabled(): target_alt /usr/lib/nvidia-current/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-current/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,066 DEBUG: nvidia_current is not the alternative in use
2012-09-28 11:23:02,106 DEBUG: NVidia(nvidia_current_updates).enabled(): target_alt None current_alt /usr/lib/nvidia-173/ld.so.conf other target alt None other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,106 DEBUG: nvidia_current_updates is not the alternative in use
2012-09-28 11:23:02,157 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,157 DEBUG: KMH enabled: False
2012-09-28 11:23:02,177 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,178 DEBUG: KMH enabled: False
2012-09-28 11:23:02,245 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,245 DEBUG: KMH enabled: False
2012-09-28 11:23:02,272 DEBUG: NVidia(nvidia_173).enabled(): target_alt /usr/lib/nvidia-173/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-173/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,273 DEBUG: KMH enabled: False
2012-09-28 11:23:02,303 DEBUG: NVidia(nvidia_173_updates).enabled(): target_alt None current_alt /usr/lib/nvidia-173/ld.so.conf other target alt None other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,303 DEBUG: nvidia_173_updates is not the alternative in use
2012-09-28 11:23:02,330 DEBUG: NVidia(nvidia_current).enabled(): target_alt /usr/lib/nvidia-current/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-current/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,410 DEBUG: nvidia_current is not the alternative in use
2012-09-28 11:23:02,427 DEBUG: NVidia(nvidia_current).enabled(): target_alt /usr/lib/nvidia-current/ld.so.conf current_alt /usr/lib/nvidia-173/ld.so.conf other target alt /usr/lib/nvidia-current/alt_ld.so.conf other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,428 DEBUG: nvidia_current is not the alternative in use
2012-09-28 11:23:02,457 DEBUG: NVidia(nvidia_current_updates).enabled(): target_alt None current_alt /usr/lib/nvidia-173/ld.so.conf other target alt None other current alt /usr/lib/nvidia-173/alt_ld.so.conf
2012-09-28 11:23:02,458 DEBUG: nvidia_current_updates is not the alternative in use