Hmm... if the system was updated to CentOS 5.2 last week (that's around the time it first became available) you more than likely received a kernel update, among many other fixes.
My guess is that, if you manually installed the nvidia binary drivers for X, you probably will need to re-run the nvidia install from a command line in order to have it update kernel modules etc.
All my CentOS boxes are servers, so I'm not completely sure on this, but that's my guess as to what probably happened...
It sounds like you can get to a working terminal... if so, try modifying the following section of /etc/X11/xorg.conf :
Change the driver entry from "nvidia" to "nv", save, and exit. Then attempt to restart X by typing "startx" at the command line.
(this changes X to use the freely-available/non-accelerated "nv" driver, which is lower in performance, and has other limitations, but definitely helps in ruling out what could be the cause of the issue here)
If your full GUI re-appears then it's simply a matter of updating the nvidia binary driver installation (usually just by running the installer again--but X has to be stopped in order to do this).
Hope this helps.