This bug has indeed been solved in 2.6.27-10-generic, how long for it to reach 
the Updates repository? This chipset and card are very common for the bug to 
remain in the default installation 8.10 almost two months already.
Sometimes the Live CD triggers this bug before the installation is finished.

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kernel 2.6.27-7-generic bug BUG: scheduling while atomic: swapper/0/0x00000100
https://bugs.launchpad.net/bugs/286285
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