I can confirm this bug and give further details.
On current Hardy with chipset and video card:
00:00.0 Host bridge: Intel Corporation Mobile PM965/GM965/GL960 Memory
Controller Hub (rev 0c)
00:02.0 VGA compatible controller: Intel Corporation Mobile GM965/GL960
Integrated Graphics Controller (rev 0c)
With xorg (1:7.3+10ubuntu4) and intel driver (2:2.2.0.90-2ubuntu2).
When X starts the intel video driver allocates (fb) memory equal to the size of
the square of the biggest (horizontal or vertical) dimension (in pixels) of any
of the attached display devices.
(That is the maximum value in the first line of xrandr's output.)
This is annoying, because you just can't hot-plug (even when now with
xorg and xrandr possible) display devices. And even when connected
first, it is not possible to set an extended (a.k.a. virtual, dual,
multiple) screen configuration, because if your first monitor is
800*600, and your second 1024x768, you are unable to place them aside of
each other. That would require a virtual resolution of at least
1824x768, instead of the automatically chosen 1024x1024.
A solution exists: place the following (sub)section in xorg.conf in the
device section.
SubSection "Display"
Depth 24
# no DRI beneath this value, see
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-intel/+bug/164049
Virtual 2048 2048
EndSubSection
--
problem with intel card and resolution
https://bugs.launchpad.net/bugs/189694
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