I get that same error message with mdk10.1-OE but the nvidia driver works. Try this. Reset your xorg to "nvidia" for the driver and reboot. You won't go into X and will boot to a command line login. Login in as root and run this:
# modprobe nvidia
# init 5
You should get the nvidia splash screen and go into X. What I found is that the nvidia driver would not load automatically even though it is listed in /etc/modprobe.conf. The above manually loads the driver and worked for me. If this works, post back and I'll show you how to edit /etc/rc.d/rc.modules which will cause the nvidia driver to be autoloaded at boot.
If it doesn't work, you can reset the driver to "nv" from the command line by running:
# XFdrake
A couple more things. the nvidia 6111 driver has a bug in it that won't allow the nvidia driver to compile. there's a fairly complicated workaround for it but the just released nvidia driver, 6629, doesn't have that problem and compiles fine. You can get it here:
http://www.nvidia.com/object/linux.html
If you installed the driver and aren't able to get X to load it is probably a problem with the nvidia driver not autoloading and the above modprobe trick should work.