You can workaround this issue by killing gnome-power-manager.  Some relevant 
links:
https://bugs.launchpad.net/ubuntu/+source/gnome-power-manager/+bug/447728
http://monda.hu/blog/2010/01/12/lock-your-laptop-and-turn-off-display-with-the-touch-of-a-keystroke-in-ubuntu-karmic/

-- 
[i945gm] LCD backlight won't stay off
https://bugs.launchpad.net/bugs/501018
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