Forwarding this bug report from a Ubuntu reporter:
https://bugs.edge.launchpad.net/ubuntu/+source/xserver-xorg-video-nv/+bug/220469

[Problem]
My display is Grainy / Blurrred / Distorted with nv driver on hardy RC at 1024x768.  See attached image.

[Original Report]
The display looks like it has been 'greyed out' in a windows 95 style (except the cursor looks fine).... What I mean by this: the text looks a bit like it has had a layer of dots placed over it and so it is hard to read - it gives a blurred and grainy appearance.

Some things I noted:
1. See the attached screenshot from when using the driver and compare it with the photo of the screen
2. The cursor renders fine
3. 800x600 resolution looks fine

This is on a Samsung X10 with an nvidia GeForce FX Go 5200 64mb. Other people seem to have had this working on other distros in the past. I am using 8.04 daily build from 20th April

The vesa and nvidia drivers can do this fine at all resolutions. The nv driver looks fine at 800x600 but terrible at 1024x768.

I have tried turning off the composite extension, and not loading the glx module

I am reluctant to use the nvidia one because it breaks suspend for me...

(Some have reported that changing to a 16bpp color depth works around the issue.)

[lspci]
00:00.0 Host bridge [0600]: Intel Corporation 82855PM Processor to I/O Controller [8086:3340] (rev 03)
     Subsystem: Samsung Electronics Co Ltd Unknown device [144d:c00f]
01:00.0 VGA compatible controller [0300]: nVidia Corporation NV34M [GeForce FX Go5200 32M/64M] [10de:0328] (rev a1) (prog-if 00 [VGA controller])
     Subsystem: Samsung Electronics Co Ltd Unknown device [144d:c00f]