That's because the dcerouter has died. Try this:

1. Press Ctrl+Alt+F2
2. Log in
3. Type: sudo /usr/pluto/bin/DCERouter
4. Ctrl+Alt+F7 to switch back to the xserver.

Here's how I fixed it:

1. Ctrl+Alt+F2 and log in
2. Type: sudo cp /etc/X11/xorg.conf /etc/X11/xorg.conf.pluto
3. Reboot

Somehow the MCE installation seems to forget to create this file.