I have previously reported this as an ubuntu bug at https://bugs.launchpad.net/bugs/401214, but this is with fresh logs and updated software.

When adding the line
  Driver "VESA"
to the "Device" section of xorg.conf, xorg starts up with only a black screen with a few lines of scattered white dots on the upper part. It starts normally when I use UMS instead of KMS (nomodeset on boot).

Switching to a VT with Ctrl-Alt-F1 removes the corruption and shows a blank screen. Switching back to VT7 gives the same corruption back. Both xorg and the VTs seem to be fully functional except for the display, I can log in and run commands blindly.

Xorg.0.log is almost identical in the KMS and UMS cases. Only difference that I don't know if is trivial is:

1750c1750
< (II) VESA(0): virtual address = 0x7f9d54b7a000,
---
> (II) VESA(0): virtual address = 0x7fdcc4cd1000,

There is a picture of the corruption at 
http://launchpadlibrarian.net/29238382/img_1503.jpg

I have had this problem since the first time I tried to use the VESA driver with KMS (spring/summer 2009). The logs are for drm-intel-next kernel from 2009-12-22, xserver 1.7.3.901 (1.7.4 RC 1), and vesa driver 1:2.2.1-2 on Ubuntu Lucid (10.04) development version.

This is a Lenovo X61 Tablet which has intel 965GM graphics.

[lspci]
00:00.0 Host bridge [0600]: Intel Corporation Mobile PM965/GM965/GL960 Memory Controller Hub [8086:2a00] (rev 0c)
 Subsystem: Lenovo Device [17aa:20b3]
00:02.0 VGA compatible controller [0300]: Intel Corporation Mobile GM965/GL960 Integrated Graphics Controller [8086:2a02] (rev 0c)
 Subsystem: Lenovo Device [17aa:20b5]