Screen goes grey in Remote Desktop Connection from windows 7 to ubuntu server

Question

I recently got a 64 bit ubuntu server based on Ubuntu Desktop 12.04 "Precise Pangolin". However I can't seem to connect to it properly from my windows 7 64 bit machine.

I can get to the login screen for ubuntu, and it seems to succeed in logging in, but then the screen just goes grey before anything comes up. (too low rep to post a picture)

I installed xrdp on the server and attempt to connect using the standard windows Remote Desktop Connection program.

I also ran the following 2 commands on the ubuntu machine to try get it to run but it was no help.

echo "gnome-session --session=ubuntu-2d" > ~/.xsession

and

sudo apt-get install gnome-session-fallback