What "material acceleration" does mean?

After upgrading from 11.04 to 11.10, all graphics became very slow. When
switching windows with Alt+Tab I even can see how windows are redrawing.
I have same graphics card as in bug description:

01:00.0 VGA compatible controller: ATI Technologies Inc Radeon Mobility
M7 LW [Radeon Mobility 7500]

Here is "glxinfo | grep render" output:

direct rendering: Yes
OpenGL renderer string: Mesa DRI R100 (RV200 4C57) x86/MMX/SSE2 TCL DRI2

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https://bugs.launchpad.net/bugs/883421

Title:
  material accelaraion disappeared

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