I have exactly the same problem as you do and my hardware is similar to yours.
AMD Athlon XP 2400+
Abit NF7 motherboard, Nforce2 based
Gainward Geforce4 MX460 graphics
I'm running Gentoo Linux 1.4_rc4 and I've tried nvidia drivers 1.0-4363 and 1.0-4349 but with the same problem. When starting X, I get a black screen and X is then locked. I can access my machine using ssh, so it is only X that has frozen the terminal. I can do a kill -9 on the X server which at this point gives me 100% CPU usage. Once that is done, all I can do is reboot because the console is wasted. Once X is killed, I can however type to the console, but it is impossible to see what I write since its all scrambled, possibly because the monitor is still in graphics mode.
I'm using a 2.4.20 kernel, the "xfs" one. This seems to be one of the few kernels that has support for the nForce2 IDE controler and support for the nForce2 USB controllers at the same time. Newer kernels will not boot with USB enabled and older kernels doesn't have working IDE support.
My logs are pretty much the same as yours, everything seems to be fine, except that all I get is that annoying black screen.
X version is 4.3. The nv driver that comes with X works fine.