I'm experiencing the same problems with 3D apps. My system has a Radeon
X1300 Series gfx card, though.

Lamer's fix was partially successful for me. It fixed the 3D problem,
but with the kernel setting in place the mouse cursor disappeared on the
second screen (looks really weird when I drag a window from one screen
to the other..).

BTW, I recommend you add the "radeon.modeset=1" to the "# defoptions="
line (in menu.lst), for example:

# defoptions=quiet splash radeon.modeset=1

And then run "sudo update-grub". Otherwise, your change will be undone
the next time your kernel is updated.

-- 
Screen flickering in 3D applications with open source radeon driver.
https://bugs.launchpad.net/bugs/484157
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