FYI  I'm seeing exactly the same effect.

A fresh install of either 8.10 or 9.04 (AMD64 desktop).  Then install
flgrx using ubuntu restricted drivers manager and I get this problem.

Loading the CPU cleans all the flickering off the screen.    It's a dual
core processor,  only one core needs to be loaded up to get rid of the
flickering.

My hardware looks pretty similar to previous post.    Same AMD chipset,
same Radeon HD 3200 video adapter.

One difference is that I see frame rates up around 1400 fps not 400/200
per previous post.

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ati driver 2.6 kernel timings 2d desktop random horizontial flicker
https://bugs.launchpad.net/bugs/355262
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