Turns out, you have to uninstall these packages (somehow they are installed automatically due to unknown reason). To avoid trouble, run it in either run level 2 or 3:
Just to be safe, uninstall virtualbox-ose-guest-x11 and virtualbox-ose-guest-utils too.
Re-run X again. You should be just fine this time.
PS: I also noticed I can't resolve any host names initially ( I used e1000 ethernet card emulation). What's the solution? Rather cheating actually: switch back to your terminal. Resolve the name of hosts mentioned inside /etc/apt/sources.list.d/ files, you may use "host", "nslookup" or "dig" command or else. Got the IP address? Good. Paste them inside those files. Then do:
# apt-get update
# apt-get dist-upgrade
# apt-get install dnsutils
I have no idea why dnsutils is left behind.......so there you go.