I have a mid-2009 MBP 15", and I recently upgraded to lion.
I also have DisplayLink hardware which worked fine under SnowLeopard.
With Lion, as per http://www.displaylink.org/forum/showthread.php?t=1059, I am unable to log in, ever, once I install the DisplayLink drivers -- even if I have none of the DL hardware plugged in. I had to reinstall Lion to recover.
The forum thread suggests turning off 'automatic graphics switching' as a workaround.
I could flip that setting and then install the drivers and reboot again. If it doesn't work, however, it's another Lion install, which is quite time-consuming. Is there some mechanism I am missing that would allow me to recover my system more rapidly if the workaround is unhelpful?