Kris, does the issue go away if DRI is disabled in your xorg.conf?  If
so, could you then leave it enabled but try this setting?

Section "Device"
   ...
   Option "AGPMode" "2"
EndSection

Also try values 1, 4, and 8 (4 is typically the default). If one of
those settings fix it, we may be able to quirk your hardware to use that
value instead of the default

-- 
X server freezes (except for mouse) with Compiz enabled on ATI Radeon Mobility 
9000
https://bugs.launchpad.net/bugs/206845
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