I again ran the natty beta2 live CD but this time I used F6 from the initial 
live CD boot menu and edited the boot string to include
nomodeset

as it happens, I also chose to mark nomodeset in the F6 options, and I also 
removed 
quiet splash
from the string also, if it makes any difference I don't know.

However, the Live CD then booted and displayed OK and ran ok in what
looked like classic gnome, without display corruption.

(No sign of fancy graphics I guess, even though the machine is capable
of them on previous ubuntu versions)

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https://bugs.launchpad.net/bugs/762135

Title:
  [i865] natty beta2 desktop live session - display heavily corrupted

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