Tried upgrading to 2.6.36-020636-generic, and adding to my xorg.conf:
  Section "Device"
    Identifier "Intel"
    Driver "intel"
  EndSection

No luck.

HOWEVER: When also disabling polling by echo N | sudo tee
/sys/module/drm_kms_helper/parameters/poll, it seems the problems went
away.

So, for those of you still haven't got it right, try upgrading to a
fairly recent 2.6.36, disable the polling, and explicitly ask for the
Intel-driver. Good luck!

-- 
linux kernel 2.6.35 slows down the whole system because of kslowdxxx processes
https://bugs.launchpad.net/bugs/662946
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