I posted this earlier today for a few ideas on how to fix it. I had a look in the /var/log and found nothing unusual in the aptitude log from the update:

Code:
Log complete.
Aptitude 0.4.11.11: log report
Sun, Jun 13 2010 13:53:48 +0800

IMPORTANT: this log only lists intended actions; actions which fail due to
dpkg problems may not be completed.

Will install 29 packages, and remove 0 packages.
180kB of disk space will be used
===============================================================================
[UPGRADE] brasero 2.30.0-0ubuntu1 -> 2.30.1-0ubuntu2
[UPGRADE] brasero-common 2.30.0-0ubuntu1 -> 2.30.1-0ubuntu2
[UPGRADE] chromium-browser 5.0.342.9~r43360-0ubuntu2 -> 5.0.375.38~r46659-0ubuntu0.10.04.1
[UPGRADE] chromium-browser-inspector 5.0.342.9~r43360-0ubuntu2 -> 5.0.375.38~r46659-0ubuntu0.10.04.1
[UPGRADE] flashplugin-installer 10.0.45.2ubuntu1 -> 10.1.53.64ubuntu0.10.04.1
[UPGRADE] flashplugin-nonfree 10.0.45.2ubuntu1 -> 10.1.53.64ubuntu0.10.04.1
[UPGRADE] gnome-keyring 2.92.92.is.2.30.1-0ubuntu1 -> 2.92.92.is.2.30.1-0ubuntu2
[UPGRADE] libbrasero-media0 2.30.0-0ubuntu1 -> 2.30.1-0ubuntu2
[UPGRADE] libcairomm-1.0-1 1.8.0-1build2 -> 1.8.4-0ubuntu1
[UPGRADE] libgcr0 2.92.92.is.2.30.1-0ubuntu1 -> 2.92.92.is.2.30.1-0ubuntu2
[UPGRADE] libgp11-0 2.92.92.is.2.30.1-0ubuntu1 -> 2.92.92.is.2.30.1-0ubuntu2
[UPGRADE] libmysqlclient16 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] libpam-gnome-keyring 2.92.92.is.2.30.1-0ubuntu1 -> 2.92.92.is.2.30.1-0ubuntu2
[UPGRADE] libpanel-applet2-0 1:2.30.0-0ubuntu1 -> 1:2.30.0-0ubuntu2
[UPGRADE] mysql-client 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] mysql-client-5.1 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] mysql-client-core-5.1 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] mysql-common 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] mysql-server 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] mysql-server-5.1 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] mysql-server-core-5.1 5.1.41-3ubuntu12.1 -> 5.1.41-3ubuntu12.3
[UPGRADE] openssh-client 1:5.3p1-3ubuntu3 -> 1:5.3p1-3ubuntu4
[UPGRADE] openssh-server 1:5.3p1-3ubuntu3 -> 1:5.3p1-3ubuntu4
[UPGRADE] pm-utils-powersave-policy 0.3 -> 0.3.1
[UPGRADE] ttf-opensymbol 1:3.2.0-7ubuntu4 -> 1:3.2.0-7ubuntu4.1
[UPGRADE] tzdata 2010i-1 -> 2010j-0ubuntu0.10.04
[UPGRADE] update-manager 1:0.134.8 -> 1:0.134.9
[UPGRADE] update-manager-core 1:0.134.8 -> 1:0.134.9
[UPGRADE] update-manager-kde 1:0.134.8 -> 1:0.134.9
===============================================================================

Log complete.
Following that I thought I would try and remove everything GDM related to get rid of the apparent gnome panels on my display. Followed this link and removed everything gdm related. When you install Xubuntu from scratch, is there gdm stuff included or has it made its way in there at a later date? Would that explain the panels issue?

Anyway, when I go to log in now there is only the xubuntu and xfce sessions to choose from, but the gui does not let me log in. Both my name and root are denied when I enter the passwords. I have to go to a plain tty shell and login and startx manually.

The log in time is also a lot longer than it was previously, as is startup. Any ideas?