I face the same problem.
$ uname -r
3.0.0-12-generic-pae
$ dpkg -l | grep nvidia
ii nvidia-common 1:0.2.35
Find obsolete NVIDIA drivers
ii nvidia-current 280.13-0ubuntu6
NVIDIA binary Xorg driver, kernel module and VDPAU library
ii nvidia-settings 280.13-0ubuntu2
Tool of configuring the NVIDIA graphics driver
This helps for a time (some seconds).
$ xset r on
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https://bugs.launchpad.net/bugs/272293
Title:
[hardy] Key repeat gets randomly turned off.
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