At least I had the benefit of seeing this thread before I updated my machine. If you've got an Ubuntu 6.06 machine, I suggest not doing any Xorg-related updates until this is fixed.
Judging from the number of posts and views in that thread and the small amount of time it's been up, I think this is one's a biggie.
If you've already busted your X server, or expect you're going to do it by accident, write down the solution:
sudo apt-get install xserver-xorg-core=1:1.0.2-0ubuntu10
Edit: There's a sticky at the Ubuntu Forums outlining a slightly different fix.
I think this is pretty much the Ubuntu team's nightmare right here - Pushing out a regular security update or bug fix that ends up breaking every user's system. (At least it's repairable, although I think any non-power user would have a hard time finding the fix.)
The shock factor for a new user when they reboot their PC and are greeted by a friendly non-graphical login is going to leave quite the mark on Ubuntu's good reliability record.
(I have a machine at work set to automatically install security updates, I wonder if it's going to get busted too...)