This problem affects me as well, but it happens only when closing the
lid, docking the notebook, and then opening the lid when docked. If I do
not dock/undock the notebook, the problem does not occur no matter how
many times I open or close the lid. The problem did also never occur
when closing the lid while docked, then undocking and opening the lid
while undocked

The problem started appearing with 9.04 (upgrade from 8.04) and the
problem is still present in 9.10 (upgraded from 9.04).

In 9.04 I have found a workaround to the problem. When clicking any
mouse button on the tray icon of Display preferences the blinking
stopped. I had to click multiple times, because while blinking some
events from the mouse are ignored (even movements). Besides that the
blinking stopped, Gnome has lost the look&feel I have configured and it
reverted back to the default gray configuration.

Somewhat later I found out that what actually happened was, that process
gnome-settings-daemon was killed due to the click on that icon. Killing
the process by hand then also helped to stop the blinking (e.g.
Ctr+Alt+F1; login; killall gnome-settings-daemon).

The last time I checked this workaround was no loner working in 9.10,
which leaves me no choice but to reboot when this occurs. This problem
makes my notebook next to unusable at work, where I use the docking
station.

-- 
[i965gm] Closing and opening lid sometimes leads to screen ENDLESSLY BLINKING
https://bugs.launchpad.net/bugs/368946
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