The upstream report indicates this issue is fixed now.

@lcampagn, if you find it is still an issue in current karmic, feel free
to reopen this bug.

@everyone else, open a new bug with 'ubuntu-bug xorg' if you're still
seeing this problem.

** Changed in: xserver-xorg-video-intel (Ubuntu)
       Status: Triaged => Fix Released

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[i945gm] rotating screen degrades performance with intel driver
https://bugs.launchpad.net/bugs/214668
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