OK. When the Linux system boots, the first thing that's started is the kernel. The kernel configures all hardware and starts the file systems and stuff like that. After that, the kernel starts the first process, init. Init never quits (until you reboot, of course) and is among other things responsible for keeping text terminals and, if activated, the boot GUI running. Init also starts the boot process. Init is controlled by a configuration file, /etc/inittab that tells it which scripts to run.
In your case, it seems that the inittab file (or something else in the startup scripts) is broken. It's difficult to tell what is broken and it may be hard to repair too. One way to fix it would be to boot the system with a rescue floppy and compare the scripts with those of a working system. But it's really strange that this occurs immediately after installation.
I almost suspect that the CD you use for installation is damaged.
I hope that you get a little understanding of what's wrong even though I can't give much help. Had you been in Linköping, Sweden, then I would have grabbed my Tom's rescue floppy (http://www.toms.net/rb/
) and come over to have a look, but from here it's kind of difficult.