I just tried this on hardy, and everything works correctly. I checked
Xorg.0.log and found:
(**) RADEON(0): DPI set to (96, 96)
I tried various DPIs and font sizes and everything is good now.
** Changed in: xorg (Ubuntu)
Status: Triaged => Fix Released
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font rendering problem
https://bugs.launchpad.net/bugs/152034
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