If you're getting dropped at a root prompt, it's not a kernel panic, but it does sound like X isn't loading. Try running "startx" from the console it drops you to and press enter. If that fails, chances are your kernel got upgraded but your video card's driver modules did not. If that's the case, here's how I would fix it from that root prompt.
apt-get update && apt-get upgrade
if that doesn't do it, try using DPKG to rebuild your kernel modules. If you have Nvidia, do dpkg-reconfigure nvidia-glx-new
If you have an ATi card, try dpkg-reconfigure xorg-driver-fglrx
I also noticed the existence of nvidia-glx-new-envy and xorg-driver-fglrx-envy packages, so if the above doesn't work try installing or reconfiguring those.