I'm having exactly the same problem, though with Suse 10.1 with Kernel 126.96.36.199. I've got a Toshiba laptop 5200 with GE Force 460 Go. I tried to install the latest NVidia driver (8762), installation is going fine, no errors during compilation, but when sax is trying to start the video, everything freezes.
The 3D drivers of NVidia used to work fine up to now, but with this new driver the support for this graphic chip seems not to work anymore, even though written in the documentation that 460 Go is still supported.
What I did is install the last legacy driver available on the NVidia site (7182). it's installing fine, 3D is working and all is going smooth.
Just try the same thing, it might work for you.