On up to date Lucid as of 2010-03-09, this is still a problem with no
xorg.conf file (X defaults to XAA). Today it survived switching to
compiz, but after rebooting and logging in, when I opened the PNG-
crasher, the system locked up.

$ cat /proc/version_signature
Ubuntu 2.6.32-16.24-generic

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[lucid] xorg froze after disabled KMS and enabling compiz on ATI Radeon 
Mobility 7500
https://bugs.launchpad.net/bugs/513950
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