I have 2 systems with screen corruption and square mouse pointer:

*desktop precise 64bit 12.04.1 clean installed on ati x800
*laptop precise 32bit 12.04.1 on lubuntu clean installed on ati mobile

This is what i tryed:

*adding 'nomodeset' to /etc/default/grub = compiz got disabled, screen lags
*sudo service lightdm restart = did not fix the screen corruption
*generated a xorg.log and adding the line swcursor = did not fix the screen 
corruption
*in ccsm category opengl, disabled sync to vblank and texture filter to fast = 
did not fix the screen corruption
*tryed another mouse icon theme = did not fix the screen corruption

I had this bug on previous versions of ubuntu aswell it did not matter
if i upgraded or clean installed

every cold boot in the morning this mouse pointer and screen got corrupted, 
after a reboot its gone
few hours wait or next morning: the screen corruption is back again...

Please let me know if there's a solution yet after all these years...

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https://bugs.launchpad.net/bugs/556782

Title:
  [rs690m] Graphics corruption with ati x1200

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