Confirming! I have this problem and there is also a duplicate report for
this problem. The duplicate was marked a duplicate of another bug, the
one where Saku was told to create this new bug because it was different
than the reported issue. Everything is pretty much the same for me,
however I am using a G31.

** Changed in: xserver-xorg-video-intel (Ubuntu)
   Importance: Undecided => High
       Status: New => Confirmed

** Changed in: xserver-xorg-video-intel (Ubuntu)
   Importance: High => Critical

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[i945GM] After loading background crashes back  to GDM. Works with 'driver 
"vesa"'.
https://bugs.launchpad.net/bugs/320821
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