Personally I apply the modeset=0 argment on bootup.
I do this by editing the /boot/grub/grub.conf file but that can be a bit risky 
if your a nubie and you may find it hard to correct any mistakes that stop your 
system booting.

However the fact that the radeon-kms.conf  does not seem to be working
for you makes me think that you are not using the radeon driver in
X.org. You can check this by typing this command;

sudo grep LoadModule /var/log/Xorg.0.log.

If you do not see LoadModule "radeon" you could not be using the driver
that setting applies to, explaining why you still see the corruption ...
e.g. you could be using the radeonhd driver.

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https://bugs.launchpad.net/bugs/556782

Title:
  [rs690m] Graphics corruption with ati x1200

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