You are right, I have the same symptoms, including system monitor corruption. 
I found out, that this configuration works quite acceptable for me, almost ok. 
See attached config.

** Attachment added: "xorg.conf"
   http://launchpadlibrarian.net/35494937/xorg.conf

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[M6] broken compiz / graphics stack / ati drivers (128MB)
https://bugs.launchpad.net/bugs/478685
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