Looks like this bug has been fixed at some point: 
I upgraded Grub to Grub 2 (Karmic), and Grub 2 didn't propagate the 
nomodeset xdriver=intel
parms that were on the Grub 1 line.
But nevertheless, the video restarted just fine.
So for me, this has been corrected by some patch that appeared between Nov 16th 
2009 and now.

Thanks to the maintainers!

-- 
Screen resolution not correct
https://bugs.launchpad.net/bugs/459547
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