Same problem here: Asus EeePC with Celeron M at 900MHz. Eight levels
available (from 112MHz to 900MHz). I can choose a fixed frequency level,
but I am unable to change the policy. I am not able to choose ondemand
(even after doing that, the system remains in performance mode)

Ubuntu 9.10, 32 bit, kernel 2.6.31-15

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CPU Frequency Scaling defaults to "Performance" instead of "OnDemand"
https://bugs.launchpad.net/bugs/344252
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