It sounds like you may be experiencing a different issue.  On Ubuntu
8.10, at least, the intel driver works fine for all chipsets EXCEPT the
three mentioned above.  On those three, once compiz is disabled, the
intel driver works fine again.

Work appears to be ongoing regarding finding a fix for running compiz on
these specific problematic cards.

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Intrepid Compiz hangs on login for i830MG, i845, and i945GM video cards
https://bugs.launchpad.net/bugs/259385
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