This bug could be a duplicate of Bug #157213 which is fixed in latest Hardy. 
Could you please recheck it with Hardy Alpha 6 Live CD?
You can download and try the new Hardy Heron Alpha release from 
http://cdimage.ubuntu.com/releases/hardy/ . If you can, please verify if this 
bug still exists or not and report back your results.
Thanks.

** Summary changed:

- xserver fails during installation on Acer TravelMate 290
+ [hardy] xserver fails during installation on Acer TravelMate 290 (852GM/855GM)

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

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[hardy] xserver fails during installation on Acer TravelMate 290 (852GM/855GM)
https://bugs.launchpad.net/bugs/176741
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