This issue was fixed on the newest upload of linux-restricted-modules,
which contains 'nvidia' closed-source driver compatible with X.Org 7.1.

** Changed in: nvidia-kernel-common (Ubuntu)
Sourcepackagename: nvidia-kernel-common => linux-restricted-modules-2.6.17
   Importance: Untriaged => Medium
       Status: Needs Info => Fix Released

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nvidia not compatible with Xorg 7.1 RENDER (Fonts don't appear in edgy)
https://launchpad.net/bugs/55802

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