UPDATE: The mods suggested above sadly did not help with Natty. I've
done a total, clean install of 10.04 LTS UbuntuStudio (as I wanted the
low-latency kernel for music apps).

With UbuntuStudio 10.04:
* Video so far works now without a hitch, straight out of the box with my ATI 
RV370 [Radeon X300] PCI card! *
What I think is OpenGL content now works just as well as anything, and I 
haven't seen any rendering issues yet. Overall, video seems much more solid and 
stable. No further command-line mods or workarounds needed at this point in 
time.

Not only that, but with the addition of just the Medibuntu package and
alsa-firmware on top, I can even drive my EMU (Creative Labs) 0404 PCI
soundcard for audio and MIDI as well!

Next step: create the new bug report re: apocalyptic Natty rendering, as
per Oliver's suggestion #89.

Thanks again Brian and Oliver for your excellent advice!

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which is subscribed to the bug report.
https://bugs.launchpad.net/bugs/556782

Title:
  [rs690m] Graphics corruption with ati x1200

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