Can you try a more up to date livecd to see if this is still an issue?
Preferably a daily livecd build with the 2.6.32-19 kernel. It looks like
you had an issue with the powersave parameter for i915 but this should
be fixed by now.
** Changed in: xserver-xorg-video-intel (Ubuntu)
Status: Confirmed => Incomplete
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massive flickering of everything but background and netbook-launcher menu
https://bugs.launchpad.net/bugs/532727
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