This info is old and probably not very useful to anyone anymore.
This is a quick and dirty way of getting Ubuntu server to auto login the user xbmc and have that user start XBMC on boot and restart it if it crashes. There is no login-manager, no WM/DE, no nothing, just XBMC. And for me, that is enough.Update 1: Checking if logged in at tty1 before starting the xbmc-neverending-loop. This as not to interfere with ssh-logins and/or logins on other ttys with the xbmc user.
Update 2: I think you could trim the startx line in the loop-script to only "startx /usr/bin/xbmc" but I'm not on Ubuntu anymore so I'll leave it as is for now seeing as I can't test it.