I can confirm this behaviour, system locks up or screen goes completely dark 
with a hard reset as the only option left. 
This is on a Laptop with an Ati Radeon 9600 Mobility M10 (RV350) card using the 
radeon driver and kwin's compositing effects enabled. 

The lock-ups occur when opening random applications, so far it happened
to me while opening kwallet, login-manager, kate, kpackagekit and
others.

Also, X sometimes uses up to 50% of the cpu-time.

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Kubuntu freezes when desktop effects are enabled
https://bugs.launchpad.net/bugs/351990
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