On my Dell Inspiron 640m / e1405, the problem disappeared after
upgrading to Feisty, too. I'm currently running Gutsy, but "Blank
Screen" and "Suspend" on lid close do not work out of the box on Gutsy.
That means when "Blank Screen" is selected, the screen turns off and
after a second turns right back on, but with the lid still closed.
Suspend is also broken in the way that my Intel wireless (ipw3945) is
gone after opening the lid again (I think I read about a fix for that
somewhere...). To conclude, lid close doesn't freeze my laptop anymore,
but it's still not working perfect, so I never use it.

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Notebooks freezes after closing lid or pressing some FN key combination
https://bugs.launchpad.net/bugs/65027
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