I also have the same issue in Xubuntu Intrepid Alpha 2 (result of uname -a):
Linux xubuntu-intrepid 2.6.26-4-generic #1 SMP Mon Jul 14 18:39:53 UTC 2008 
i686 GNU/Linux

My graphics card (result of lspci | grep -i vga):
01:00.0 VGA compatible controller: ATI Technologies Inc RV280 [Radeon 9200 PRO] 
(rev 01)

Today I installed the new xserver-xorg-video-ati and xserver-xorg-video-radeon 
packages:
xserver-xorg-video-ati:
  Installed: 1:6.9.0-1ubuntu3
xserver-xorg-video-radeon:
  Installed: 1:6.9.0-1ubuntu3

If more information is required, please let me know.
But they also did not resolve this issue

-- 
xorg says (EE) Failed to load module "dri2" (module does not exist,  0)
https://bugs.launchpad.net/bugs/247120
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