I'm afraid I should not say it's working fine. The 3D performance is way
too slow. I get about 880 fps in glxgears (using a Dell Inspiron 1525
Core 2 Duo 2.0 Ghz and 3 GiB RAM) whereas even my old laptop with a
sempron 3100+ (1.8 Ghz), 640 MB RAM and 128 MB ATI Radeon Express 200M
(shared memory) which is not known to be fast, makes it to about 1100
fps.

This appears to be a problem with the default driver used in Hardy.  I'm
not able to compile the appropriate driver offered by Intel.  I was only
able to compile the DRM. After installing the DRM Kernel module I was
not able to apply direct rendering. For this reason I reinstalled Hardy.
I use the default driver without desktop effects and slow performance
rather than no direct rendering.

-- 
intel gm965 freezes with 3d applications
https://bugs.launchpad.net/bugs/120834
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