I've had this problem on every machine I've used Knoppix CD to boot, run the script knx-hdinstall, and then boot up from the HD.

The trap I keep falling into [on new machines] is that the kdm's login screen
has "default" or "previous" selected by default. Since I've never logged in with that username, it doesn't have a valid previous session. I will type a good username and correct password, click Go, Xwindows will blink and I am returned to the login screen like I've mistyped something.

Since I've been building up several machines, it is easy to forget that you are on new machine and for each new account, "default" X Windows session is really selecting nothing.

Selecting a "kde3" explicidly is a habit I need to pickup.