Got exactly the same problem here.
I am running Gentoo with 2.4.20 gaming r3 and also have installed the nvidia module (and tried to to emerge the module).
Until here all worked fine....the nvidia module is loaded and I can see it with lsmod. I also set the driver from "nv" to "nvidia" as recommended by the README.
Now when I type "startx" the monitor switches to some higher mode. There is now a white Background with some green scrambled something I cannot see correctly. I suppose its the nvidia logo perhaps. Then I started waiting for I think about a minute and nothing happened so I decided to hit CTRL-ALT-DEL and this (even when I couldn't see it) reboots the machine without corrupting any drives.
So if you found a solution to this please tell me whats to be done.