Well, thought I would note this here for others' use - steps required to get RHEL5/CentOS5 to give you a usable display (without the corruption on the bottom 1/10th of the screen).
- At the gdm login prompt, drop to a console session: Ctrl-Alt-F1
- log in and su to root: su -
- stop the graphical login screen by switching to runlevel 3: telinit 3
- take a backup of the xorg.conf file:
cp /etc/X11/xorg.conf /etc/X11/xorg.conf.backup"
- ask X to create a config for us: X -configure
- copy this config to our live xorg.conf, but force the vesa driver:
sed 's/mga/vesa/' /root/xorg.conf.new > /etc/X11/xorg.conf
- edit the generated xorg.conf for keyboard settings etc with your favourite console editor
- test the config: startx
- assuming all is ok, System -> Log Out or: Ctrl-Alt-Backspace
- return to runlevel 5: telinit 5
- Don't forget to log out from VT1 Ctrl-Alt-F1
Hope this helps someone - its not a fix, but will at least give you a usable X session until a better solution presents itself.