I have a similar problem. 1core CPU jumps around for Xorg, 100% all Xorg.
$ lsb_release -rd
Description:    Ubuntu karmic (development branch)
Release:        9.10

HW lenovo R61
# lspci
00:02.0 VGA compatible controller: Intel Corporation Mobile GM965/GL960 
Integrated Graphics Controller (rev 0c)
00:02.1 Display controller: Intel Corporation Mobile GM965/GL960 Integrated 
Graphics Controller (rev 0c)

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MASTER:  xorg high cpu usage, general system sluggishness
https://bugs.launchpad.net/bugs/294972
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