Arch Linux and Fedora has the same problem 
http://bbs.archlinux.org/viewtopic.php?id=86211&p=3
https://bugzilla.redhat.com/show_bug.cgi?id=531825

One interesting post:

"I upgraded today to

kernel-2.6.31.6-142.fc12.i686
xorg-x11-drv-ati-6.13.0-0.12.20091119git437113124.fc12.i686

The kernel update did not seem to cause any change, but the radeon driver
update did caused one change, instead of getting a black background with
working mouse cursor, I instead get the fedora wallpaper with working mouse
cursor.

syslog is still getting filled with the same errors as before.   "

** Bug watch added: Red Hat Bugzilla #531825
   https://bugzilla.redhat.com/show_bug.cgi?id=531825

-- 
[Lucid] ATI KMS causes DRM error
https://bugs.launchpad.net/bugs/509273
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