Actually, the lspci output probably doesn't matter for this bug.
I notice this error message comes from mesa rather than -ati. Refiling.
./mesa-7.2+git20081209.a0d5c3cf/src/mesa/drivers/dri/common/texmem.c:
fprintf( stderr, "[%s:%d] unable to allocate texture\n",
** Changed in: mesa (Ubuntu)
Sourcepackagename: xserver-xorg-video-ati => mesa
Status: New => Incomplete
--
continuous [driAllocateTexture:636] even when idle
https://bugs.launchpad.net/bugs/305586
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