Experiencing the same bug here with a ATIx1250 card using the Radeon
driver.  The bug started when I upgraded from Ubuntu 9.10 to 10.04 Beta
2.

My twinkling contours are similar but worse.  Even more distortion.

Tried manually changing resolutions and refresh rates using X RandR to
no avail.  Tried removing Virtual line from xorg.conf as well, no
improvement.

-- 
2nd Screen not properly working on 10.04 [ATI X1200M] (despite working in 9.10)
https://bugs.launchpad.net/bugs/560775
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