not much related to your problem, but
Other thing that I find annoying is that xorg.conf no longer exists and I am relying on the HAL daemon, about which I know nothing. It took me ages to find how to change the X keyboard map - very frustrating. How do I confirm which video driver etc.?
You can create a xorg.conf (I suggest running X -configure), at least for the video options, it will be used.
Dumb question : did you "make modules_install" of the recompiled kernel? Because this sounds like a video driver issue. Try staying in a VT, and running X (the command, with no DE/apps running). If it hangs, you know where the problem lies... Having to load modules manually is really strange, is udev running?