I also had this problem this morning after upgrading to Edgy overnight using: 'sudo apt-get update && sudo apt-get dist-upgrade && sudo apt-get dist-upgrade'.
It said that the xserver wasn't configured correctly. So, I did:
sudo dpkg-reconfigure xserver-xorg
and said that it was reconfigured - but still no luck.
After trying 'sudo apt-get dist-upgrade' again, I found out that all of the xserver-xorg components had been held behind, even though it swore blind that it had configured it correctly.
So I did
sudo apt-get install xserver-xorg
and once it completed, I could now login to GNOME.
MY current issue now, is the login manager comes up with an error saying that the gnome login manager keeps crashing, and it tries an alternate(looks like the old x login window). This then works.
Don't know if you have the same exact problem, but it might be worth a look.