Running Hardy at the present on a ThinkPad R61i  everything works fine for me 
on 965. (Only modification is textrueoverlay set to false in xorg.conf, I guss 
it will be default shortly for intel.)
Suspend, compiz, xv, gl, smooth scrolling. Everything.

-- 
readd intel 965 to blacklist
https://bugs.launchpad.net/bugs/184720
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