Well, this is back with a vengeance in 9.04.  I'd switched back to proprietary 
drivers in 8.10 since this was so annoying, but in 9.04 those no longer work 
with my machine:
https://answers.launchpad.net/ubuntu/+question/68783

In fact, 9.04 is a bit of a nightmare all around when it comes to graphics:
- Unusable system if I try proprietary drivers
- Can't login by default if I use the open source ones (I have to disable 
compiz effects first)
- Once I finally get the open source drivers going I have cursor corruption all 
over the screen, and can't run my monitors at the proper resolutions.

Not impressed.

-- 
[1950] Vertical bands of interference around HW cursor
https://bugs.launchpad.net/bugs/320771
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