I have the same problem on my old Asus S1300 with i830 graphic chip as
well.
$ lsb_release -rd
Description: Ubuntu 8.10
Release: 8.10
$ apt-cache policy xserver-xorg-video-intel
xserver-xorg-video-intel:
Installiert: 2:2.4.1-1ubuntu10
Kandidat: 2:2.4.1-1ubuntu10
Versions-Tabelle:
*** 2:2.4.1-1ubuntu10 0
500 http://de.archive.ubuntu.com intrepid/main Packages
100 /var/lib/dpkg/status
Xorg.0.log: http://pastebin.com/mc839b9
`lspci -vvnn`: http://pastebin.com/m40867809
** Attachment added: "screenshot.png"
http://launchpadlibrarian.net/19739105/screenshot.png
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[i830] font drawing corruption regression ubuntu intrepid
https://bugs.launchpad.net/bugs/293059
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