I've installed 
xserver-xorg-video-radeon_6.9.0+git20080930.c359c2a3-0ubuntu0tormod_i386.deb 
from Tormod's PPA.
Now xv is fine, and Xorg doesn't consume so high CPU.
Although "(II) RADEON(0): XAA Render acceleration unsupported on Radeon 
9500/9700 and newer. Please use EXA instead." is still in xorg log.
Thank you for the help.

-- 
Xv displays flickering pixel garbage (intrepid)
https://bugs.launchpad.net/bugs/267297
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