As Jens Janssen posted, installing the updated version of xserver-xorg-
video-radeon (that's under xserver-xorg-video-ati) found on
https://launchpad.net/~tormodvolden/+archive/ppa solved my problem.

Thank you Jens!

Package I've downloaded is this:
https://launchpad.net/~tormodvolden/+archive/ppa/+files/xserver-xorg-
video-radeon_6.12.2.99+git20090504.da58e351-0ubuntu0tormod_i386.deb

-- 
X1200: flickering after update on Jaunty
https://bugs.launchpad.net/bugs/331522
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