The change you made told it to load the proprietary/restricted nVidia driver instead of the open source driver. Which is correct. The error just indicates that it cannot load that driver. You should note that it will default to nvidia on install, so it is likely it changed to nv at some point because it cannot load the proprietary driver.
Are you SURE that you followed the instructions at http://wiki.linuxmce.org/index.php/Display_Drivers#NVidia_Chipsets
exactly, and substituted in the latest version in the URL??? Did it go through the wizard and tell you it couldn't find the kernel interfaces so was compiling a new one? Did it say it had successfully installed the drivers? And at the end, when it asks you if you want it to auto configure X, did you say no? (because that can screw up the config file for LMCE)
The driver must successfully install. And the xorg.conf file must be configured appropriately. If you are not sure the file is right, then you should trigger the AV Wizard again (reboot, then hold down shift whilst the Kubuntu progress bar goes across), select your settings again and exit. This will refresh the xorg.conf with a basic LMCE one. Which you can then tweak, but you should find it is already set to "nvidia" if the drivers installed correctly.