The bad performance is caused by lack of direct rendering:
(EE) intel(0): [drm] Failed to open DRM device for : No such file or directory
(EE) intel(0): Failed to become DRM master.

Does this command show the drm module loaded?:
lsmod | grep drm

If it doesn't return anything, what happens when you try to load the drm module 
manually?:
sudo modprobe -v drm

-- 
[karmic] Xorg: Horribly bad performance and 100% cpu usage
https://bugs.launchpad.net/bugs/439351
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