I can confirm that - since I installed lucid's kernel (linux-
image-2.6.32-13-386) the screen artifacts disappeared (& KMS is enabled
by default). Besides, the performance of my ATI card is really amazing
now... It's like I got a new notebook :) Thanks!!

01:00.0 VGA compatible controller [0300]: ATI Technologies Inc Radeon
RV250 [Mobility FireGL 9000] [1002:4c66] (rev 01)

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[KMS][R300] Screen artifacts on X
https://bugs.launchpad.net/bugs/413259
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