Here are some more observations that also apply to 3.8.0-desktop-0.rc5.1:
I created /etc/dracut.conf.d/99-local.conf with the following content:
=====
# dracut modules to omit
omit_drivers+=" nouveau"
# additional kernel modules to the default
add_drivers+=" nvidia304"
=====
And then I rebuilt the initrd.
I added xdriver=nvidia304 to the kernel line in /boot/grub/menu.lst
1: I boot in single mode (add single at the end of kernel line)
2: Both 'lsmod|grep nou' and 'lsmod|grep nv' show that nvidia is loaded and nouveau is not loaded
3: init 3
4: error message: "nvidia304 already installed"
5: NVidia driver is unloaded and nouveau is loaded before init 3 finishes.
my console resolution changes from 1024x768 to 1280x1024.
Point: NVidia gets unloaded during the boot process.