It should not stop there unless it did before. It should start your gdm or kdm depending which one is setup. GDM is the default unless you change it in /etc/inittab. You can type your username and password there if you want but that is your number 1 tty which is also linked to the gui part on number 7.
Let me try to explain this. When you have your gui up either kde or gnome or whatever it is linked to tty1. To see example of this when your in the gui (which is Alt-Ctrl-F7) hit Alt-Ctrl-F1. This brings you to tty1 ( terminal login ). If you hit Alt-Ctrl-F2 that brings you to tty2 which you can login to and even start another gui which would be at Alt-Ctrl-F8. To get back to the gui hit Alt-Ctrl-F7.
Now it sounds like X is having a problem starting properly or is slow. When you see the terminal at boot it should automatically start the gui login manager. Mine only takes about 1 second and notebook about 2 seconds, but I am loading a few things before it starts also.
You will not see any characters when typing the password. It is default for safety. You should be able to enter it and hit enter. When you get to this point and logged in and the gui still does not start after say 2 minutes type ' kdm ' and see what happens. Let me know if something happens. I will include a few lines from my /etc/inittab file that shows the login manager kdm and the tty's setup. Yours should be the same except for the last line. If I remember it starts something /etc/X11/xdm or something. I myself perfer the kde version called kdm.
Here is the last part of my /etc/inittab file that starts KDM instaed of GDM.
# Run gettys in standard runlevels
# Run xdm in runlevel 5
Been a long time since I did dial-up and for that that it would be with stuff on linux 4 or 5 years ago. I did have it setup to automatically dial on demand when either it or one of my network machines called out to the internet. Work pretty good except for Windows. I had to configure it to not except calls it made to the internet doing it stupid little check ins to MicroSoft.
If I could be of anymore help just ask.
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