There's still a bug in i965_dri.so. Basically it needs to be compiled with an older gcc to avoid miscompilation.
I read this off some mailing lists for people seeing
"i915_dispatch_cmdbuffer failed" in the kernel logs.
** Changed in: mesa (Ubuntu)
Status: Fix Released => Confirmed
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Support for Intel 965 (GMA X3000) doesn't work
https://launchpad.net/bugs/62135
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