Transition to Desktop shows black screen

At the lightdm screen, when using the arrow keys up or down to select different user accounts, then going back to the initially visible account, the wallpaper disappears during login and is replaced with a black screen, mouse cursor visible.

However, when I don't touch the arrow keys and log straight into my account, my chosen wallpaper and the Ubuntu watermark stays until the logging in process is complete.,

What I would expect is that there is no black screen when logging in, regardless of pressing the cursor keys or not.

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: lightdm 1.2.0-0ubuntu2
ProcVersionSignature: Ubuntu 3.2.0-23.36-generic 3.2.14
Uname: Linux 3.2.0-23-generic x86_64
NonfreeKernelModules: nvidia wl
ApportVersion: 2.0.1-0ubuntu5
Architecture: amd64
Date: Wed Apr 18 16:52:41 2012
InstallationMedia: Ubuntu 11.10 "Oneiric Ocelot" - Release amd64 (20111012)
ProcEnviron:
 TERM=xterm
 PATH=(custom, no user)
 LANG=en_US.UTF-8
 SHELL=/bin/bash
SourcePackage: lightdm
UpgradeStatus: No upgrade log present (probably fresh install)