That worked like a charm! Thanks, foureyesboy!

I'm reassigning this to xorg-xserver-video-ati.

Let me summarize a bit. Folks running Ubuntu on laptops with Radeon Mobility 
7500s starting with Ubuntu 9.10 have seen gnome-system-monitor, gnome-do, and 
notifications appear as black and white stripes, or, as I described it, 
"static."
Starting Emerald or xcompmgr in Fluxbox turned the entire desktop into the 
famous "static" for me. Turning desktop effects to Normal has worked for some. 
Modifying the xorg.conf as foureyesboy has above has worked for foureyesboy and 
myself. 
For more info, check out this thread on UbuntuForums: 
http://ubuntuforums.org/showthread.php?p=8278160

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Gnome System Monitor displays only static
https://bugs.launchpad.net/bugs/440608
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