It seems to be a common problem with some graphic cards.
Take a look here:
Hope it helps.
I personally repaired it by upgrading using the Ubuntu 11.10 Live-CD on a USB stick. The problem is that it didn't even boot the GUI due to my graphic card. So I had to follow the following procedure writen by prince_of_death:
Step 1: boot from the live usb and as soon as it displays the ubuntu color screen press 'F6'. this will take u to a boot option page where a pop up bar will appear due to F6 being presses. press 'Esc' key and go up to "try Ubuntu Without Installing" and edit the kernel string to add "poulsbo.asd=1 psb_gfx.asd=1" to the end then press enter.
Step 2: the live usb will then boot to the desktop GUI where you can start the installation.
(I selected here the second option "Upgrade from 11.10 to 11.10")
Step 3: after installation reboot your system and at the GRUB menu press 'e' to edit the first kernel. (this is needed or it wouldn't boot to the desktop GUI)
Step 4: modify the kernel string after 'quiet splash' and add "poulsbo.asd=1 psb_gfx.asd=1" then press 'F10' to boot with the modified kernel
Step 5: it will now boot to the desktop GUI were you will now install the EMGD driver with :-
sudo add-apt-repository ppa:gma500/emgd-1.8
sudo apt-get update
sudo apt-get install xorg-emgd emgd-dkms
(once the EMGD driver is installed you no longer need to edit the kernel at boot)
Step 6: this step might also be needed to prevent session from not being started.
sudo mv /etc/init/plymouth.conf /etc/init/plyouth.conf.disabled