What’s wrong with this query?

One problem might be that you don’t have an endwhile statement in there to end the loop.

I presume you are trying to achieve something like what is found in the example here:
http://codex.wordpress.org/The_Loop#Multiple_Loops_in_Action

That code:

<?php $my_query = new WP_Query('category_name=featured&showposts=1');
while ($my_query->have_posts()) : $my_query->the_post();
$do_not_duplicate = $post->ID;?>
<!-- Do stuff... -->
<?php endwhile; ?>
<!-- Do other stuff... -->
<?php if (have_posts()) : while (have_posts()) : the_post();
if( $post->ID == $do_not_duplicate ) continue; update_post_caches($posts); ?>
<!-- Do stuff... -->
<?php endwhile; endif; ?>

The idea of assigning the do_not_duplicate variable the ID of the first post is so that the one post in the first section is checked in the second loop.
if( $post->ID == $do_not_duplicate ) continue;

…which means, if the post ID from the earlier loop of the first post is coming up in the second loop, continue and ignore it for this loop.