What video driver is set in the xorg.conf? Perhaps 1024x768 is out of range for the driver, unless you lower the bpp. In the xorg.conf look at the lines that begin with Mode. It should be a list of resolutions, each enclosed in "". The first one listed is the default, and any that you don't want to enable you can delete.
I remember having a problem once using KDE's Control Center to change my resolution. I finally just edited the conf file as described above and found it to be much easier, both for making changes and troubleshooting.
EDIT: about the runlevel thing, if you are at a prompt that you can type commands, try telinit 3. Or from a boot prompt add the parameter init 3 after selecting your boot choice.
Last edited by dracolich; 07-19-2007 at 01:51 PM.