Have the same problems since karmic, but only when system started with
an external monitor plugged in. I noticed that downgrading kernel then
fixed that issue (but brought up many new ones).Now I was trying to
install Lucid, and since gnome loaded I had white flickering and kind of
"drunken-view-mode", which made the system barely usable. Switching off
KMS made the miracle! Installing now.

BTW... what negative consequences can disabling KMS have other than
losing plymouth boot screen?

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[i830] graphics hang blank screen on lucid boot
https://bugs.launchpad.net/bugs/542208
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