I have the exact same thing happening with my Radeon 9500 Pro.  Was fine
in 8.10 (and Windows) but in 9.04 and 9.10 beta it displays the graphic
glitches/artifacts.  It also crashes fairly regularly when dragging
Icons.  I have tried the xorg-edgers xserver-xorg-ati and the problem is
still there.

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Screen artifacts with ati radeon 9800SE
https://bugs.launchpad.net/bugs/162625
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