Hi,
I have exactly the same problem.
I have been using the DisplayLink drivers for over a year on Snow Leopard and all was fine until I updated to Lion and started having display problems - login screen and apps not drawing properly, although the content is there because if you click around blindly, things happen.
(the monitor on the usb adapter seemed to be working fine but the display problems affected all screens, not just the one on the usb adapter using DisplayLink).
I tried installing the 1.7b2 drivers and it didn't help at all.
Last night I did a clean install of Lion and all was fine....until I installed the DisplayLink 1.7b2 drivers and then on reboot the login screen wasn't drawn again - I could login blind and apps were not displaying either so same problem.
Uninstalling DisplayLink fixes the problem again.
Thanks,
Ian
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