*FIXED*

This is an issue with Xorg, specifically with the new option AccelMethod. Just 
remove or comment out the following line in your /etc/X11/xorg.conf file and 
the problem goes away:
Option "AccelMethod"

** Changed in: ubuntu
       Status: Confirmed => Fix Committed

** Changed in: gdm
       Status: Confirmed => Fix Committed

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[jaunty][alpha6]X-Server restart randomly
https://bugs.launchpad.net/bugs/342324
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