Same problem here... After upgrading to kernel 2.6.16 on Debian Ctrl+Alt+Fn
started crashing kdm with:
kdm X server for display :0 terminated unexpectedly
I get a moments black screen in an attempt to switch modes followed by an X server reset (as if I had pressed Ctrl+Alt+Bksp). Doesn't matter if I'm logged on to X or not (meaning it holds true for the log on screen). Strangely it will go to a text terminal if Alt+N (Terminal login) is specified at log on.
I was using the same driver version prior to the kernel upgrade, there was no problem then.
My kernel is Debian's stock kernel 2.6.16-2-686-smp
Current nVidia driver: 1.0.8762
Graphics Card: Asus Extreme N6600 Silencer