A few more pieces of info on this bug.
1. I recently upgraded the kernel (see below), but this had no impact on the bug.
Linux myhost 2.6.16-2-k7 #1 Sat Jul 15 23:05:41 UTC 2006 i686 GNU/Linux
2. I tried a friend's nVidia PCI video-card to see if the problem is specific to the ATI Rage 128 card, but the same problem persisted with the nVidia card.
3. I tried using the plain "vesa" driver for all cards at once as well as various combinations of plain "vesa" and card-specific drivers, but the same problem persisted.
4. I feel that bug 378081 might be related to this one:
378081 "Cannot read V_BIOS" memory allocation
http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=378081
