It's possible your mac is going to sleep when you close the lid with this new update. Have you tried waking it up with an external keyboard? I heard about an app called insomniax that might do the trick if it's a sleep problem.

I am seeing the same thing on Oct/2011 MBP. I had to unplug my DL monitor (DELL 22" widescreen) that I have rotated. Updated with the combined update and was blue screening.

After unplugging the DL adapter I am down to just my 27" Apple Cinema Display. Would like to get this resolved as well.

OS X 10.7.3 and Displaylink driver 1.7
 

I've tried this on both my latest Macbook Air and my Mac Pro.
Everything seemed to work fine when I used my Diamond USB display adapter pro (BVU195) with OS X 10.7.2 and Displaylink driver 1.7.

It no longer works after upgrading to OS X 10.7.3. No longer works as in the screen turns blue on the main monitor and nothing appears on the other monitor. I have to end up restarting the computer after unplugging the adapter.

Any suggestions? Know if a new beta driver is coming out that's compatible with the latest OS X? Thanks!

same issue with plugable adapter
just upgraded to 10.7.3 and driver 1.7 won't work

Still No Luck
 

I tried these and every other suggestion from DisplayLink guys and I still can't use the DisplayLink adapters. I have 3 screens connected to the adapters, one is rotated 90 degrees and my main screen plugged directly into my MAC. At this point, if I can use 2 of my non-rotated DisplayLink screens I would be happy until the fix is out.

No matter what I do, when I plug in my display link adapters I get a blue screen on my main screen...and nothing else shows up. If I unplug my main screen and plug it back in, it comes up, but the side screens do not work.

Any thoughts??

Anyone tried NVRam reset?
 

Both of my screens are rotated so I haven't tried this but has anyone that doesn't have a rotated screen tried an NVRam reset (more widely known as PRAM)? http://support.apple.com/kb/HT1379

I would unplug the adapter, reset the NVRam and then plug in the adapter.

Resetting NVRam usually clears resolution settings and I'm thinking its worth a shot.

To the DisplayLink Team: I'm still very disappointed that you cannot be bothered to update the Mac software page to exercise caution when updating due to some known issues. I think it is ridiculous that people would have to come to the forum and research this. My $.02

If only it was that simple, I've done PRAM resets and SMC resets to fix this issue to no avail. I even reinstalled lion from the recovery partition.

That sucks :( Did you restore lion to 10.7.2? I did that and got my display working again and rotated. At first, the screen displayed garbage, but came good after changing the settings in the display preference.

*edit* I also reinstalled the display link driver ver 1.7.

It looks like the DL team have put a warning message in RED next to the Mac driver download section of the site. Thank you for doing this, and hopefully that will help people who haven't updated yet. Fingers crossed a real solution is near.

Yeah I saw they finally added a warning to the Mac page. Only took 'em a week and I know I asked at least twice in this thread for it. Better late than never I suppose.

I'm a little disheartened that the DL team hasn't posted anything in a few days - I'm getting ready to reinstall Lion again and just go to 10.7.2 - I was holding out but with no updates/ETA I don't think I want to wait any longer.