Keep in mind that these steps are for Ubuntu. Other distro's may differ.
Login as the user who installed XBMC. I find it easier to do all this from my laptop, ssh'd in to the XBMC box.
Using your favourite editor, create a file in your home directory called .xinitrc that contains the following:
exec /usr/bin/xbmc --standalone
Make .xinitrc executable:
chmod +x .xinitrc
Edit your .bashrc and add the following as the last line:
sudo apt-get install rcconf
Run rcconf and turn off gdm:
sudo apt-get install mingetty
sudo vi /etc/events.d/tty1
Change the line:
exec /sbin/getty 38400 tty1
exec /sbin/mingetty --autologin uname tty1
Reboot to test.
With this setup, you're not loading gdm or gnome. You're not loading a window manager. The load will be lighter and the boot process will be faster.
Please let me know if there are any questions! Thanks to AlTheKiller for some pointers.