Comment 33 for bug 573557

"At this point I suggest that you either keep using the nvidia installer or that you perform a clean installation of Ubuntu and use only our packages."

I managed to get the problem solved. I removed the proprietary driver, using "sudo nvidia-installer --uninstall".
Next, apt-get install nvidia-current. Then, do an apt-get remove --purge nvidia-current. This gets rid of most of the hanging config files, plus it spits out a list of "not empty" files and directories, which I manually removed. I had to purge xserver-xorg-video-nouveau, too.Then I was able to install the driver from gnome (kde still wouldn't start) using jockey. Then I could put back my custom xorg.conf (which is needed to run the two video cards in sli configuration). Now all is well with kde, except jockey is unhappy that I have a custom xorg.conf. Too bad. It's alive.

By the way, a workaround has been found to get the live cds to boot on Dell systems. Doing that, I was able to do a "clean" install. What I found is that all of the video drivers are located in exactly the same places as on the supposedly corrupt system. So for this system, they are being installed somewhere other than specified in https://bugs.launchpad.net/ubuntu/+source/nvidia-graphics-drivers/+bug/548362/comments/37, even in a clean install.