@Jason
       I read the logs. The reason you are seeing this is that the machine is 
using the "Vesa" video driver and not the intel video driver. The revision of 
the intel chip may not be in the database of supported intel chips in 8.10. 
Could you try out a Jaunty Live CD and see if you get the expected results?

http://cdimage.ubuntu.com/daily-live/current/jaunty-desktop-i386.iso

 Trying to figure out if the newer version of the intel driver in our
Jaunty (9.04) release has support for this card.

-- 
[West Lake] Ubuntu 8.10: System unable to detect optimized graphic resolution.
https://bugs.launchpad.net/bugs/338598
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