Low resolution mode -VM running Ubuntu in OSX freezes

[ash]

I am running ubuntu 12.04 in my macbook pro (mountain lion) inside Virtual box. I had my Laptop connected to a LCD screen and had been using it for a day or two now. After I had unplugged my mac from the screen and tried to boot up the VM it said that Ubuntu is running in low graphics mode and that I should configure stuff myself. I would click yes and the VM window would stop taking keyboard or mouse inputs. Why is the machine not able to automatically detect my graphic and video config? How do I resolve this? I have allocated almost 2GB of RAM(Since otherwise the machine would freeze in the middle of a long compile process) and some 50 MB of video memory.