@Rob.
Please build/install the latest openchrome driver and enable debug mode.
The detail build instruction for Ubuntu/Debian is available at:
https://help.ubuntu.com/community/OpenChrome

Then attach your /var/log/Xorg.0.log file with 256MB graphic memory. 
Attach also your /var/log/Xorg.0.log file with 64MB graphic memory. 

Is this problem also exists with 128MB memory

@Vsevolod & Leonardo Prosperi
Try to increase number of memory in BIOS
Is it helps?

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[K8M890]Square cursor with Ubuntu 9.04 livecd, during VNC connection
https://bugs.launchpad.net/bugs/377402
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