This should be fixed in 7.10. Reopen if you can reproduce it with 7.10
or newer.

** This bug is no longer a duplicate of bug 75499
   Failure to identify and use appropriate video driver

** Changed in: discover-data (Ubuntu)
Sourcepackagename: xorg => discover-data
       Status: New => Fix Released

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Fails to detect Nvidia 7600GT to use "nv" driver, defaults to vesa which is 
terribly slow
https://bugs.launchpad.net/bugs/67573
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