I have the very same problem with another intel chipset, so I don't
think I should start another bug on launchpad.

sudo lshw -C display
  *-display:0 UNCLAIMED   
       description: VGA compatible controller
       product: Mobile 4 Series Chipset Integrated Graphics Controller
       vendor: Intel Corporation
       physical id: 2
       bus info: [EMAIL PROTECTED]:00:02.0
       version: 07
       width: 64 bits
       clock: 33MHz
       capabilities: msi pm bus_master cap_list
       configuration: latency=0

Compiz is working but with a poor performance. glxgears is about 750fps and it 
leaves a ghost image as I move its window.
Hedgewar graphics (2D!) are completely broken, Tremolous makes the system hang 
after the welcome screen.
Google Earth draws random colour textures and then the system hangs.

I'm very disapponted with intel... I hope there will be soon a fix for this.
Tell me if you need more info.

-- 
Poor graphics performance and rendering errors on Intel GM965 system, Ubuntu 
8.10
https://bugs.launchpad.net/bugs/252094
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