maybe the bug should be split, as it describes two kernel version.
to clarify:

2.6.38 is UNUSABLE: GPU hangs all the time

2.6.35: Is usable(with gnome 2D at least), but produces smaller
rendering errors due to page_flipping problems. This leads to minor
graphic glitches as parts of the upper panel disappear and show the
background-image and are fixed when rerendered (hover over launcher-
icon, or open the menu in case of a glitch below the "System" Menu)

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https://bugs.launchpad.net/bugs/773356

Title:
  graphic card regressions in natty with intel graphics card

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