Sounds like this was fixed in Edgy or Feisty, so am closing as fixed.
If anyone is on Dapper LTS and need the fix backported for that, please
nominate it for Dapper LTS. If you're not tied to Dapper LTS, it sounds
like trying out Edgy or Feisty would be worthwhile for fixing this
issue.
** Changed in: xorg (Ubuntu)
Status: Incomplete => Fix Released
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xorg consumes 99.9% CPU and hangs on Kubuntu Dapper
https://bugs.launchpad.net/bugs/61250
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