These are the current workarounds for radeon users:

1. Turn on KMS - the boot parameter video=ofonly should do this.  If
this causes freezing then combine with radeon.agpmode=-1

2.  Use the fbdev driver.  To increase the colour depth use a boot
parameter such as video=radeonfb:1024x768-32@60.  Obviously what you
write is monitor dependant, but note the 32 for the depth and not 24
(that caught me out for a while).  You could alternatively write an
xorg.conf to increase the colour depth.

You have suspend with the fbdev driver and that may appeal to some
people.  You get hardware acceleration with KMS and that maybe needed by
some people.  What you can't have currently in 12.10 is both.

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https://bugs.launchpad.net/bugs/1040526

Title:
  Graphics dithered on Desktop image

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