Looks like your system is configured to use XAA, which is deprecated in
Hardy (and can cause issues not unlike this). Can you please test with
EXA and see if the issue exists there as well?
** Changed in: xserver-xorg-video-intel (Ubuntu)
Importance: Undecided => Medium
Status: New => Incomplete
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Hardy regression: i810 video incorrect size; cursor paints blocks
https://bugs.launchpad.net/bugs/198521
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