I believe this bug was fixed in savage driver 2.3.3 (Ubuntu 12.04).
** Changed in: xserver-xorg-video-savage (Ubuntu)
Status: Triaged => Fix Released
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https://bugs.launchpad.net/bugs/670790
Title:
Xv / XVideo accelerated video width is limited by / depending on the
screen resolution on S3 Savage, but only if the laptop LCD is the
primary screen
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