uname -m : i686
uname -r : 2.6.31.4
Intel Driver : xserver-xorg-video-intel 2:2.9.0-1ubuntu2~xup~3 and libdrm-intel1 2.4.14~1ubuntu1~xup~2
OS : Ubuntu 9.04 Jaunty
Hardware : DevonIT TC5 also seen on a Dell Inspiron 1501
Connectors : On the TC5 we have dual DVI and the bottom slot was using a DVI to VGA converter. On the Dell Inspiron Laptop we had the normal laptop display and a VGA output.

Steps to reproduce:
1. Load a machine with Jaunty or greater (a live USB key works fine)
2. Make sure to enable a dual monitor setup (non mirror) so the screens are side by side.
3. Set the resolution of both monitors to 1280x1024 or greater if supported
4. Open a terminal and run the following command:
  gst-launch videotestsrc ! xvimagesink

You'll notice one or more of the following. Typically a window pops up where the test video should be rendered however you either get a snap shot of whatever was under the window or you'll get a black screen.

Also, depending on the resolution if you look to the upper left hand corner of the dual display you'll actually see the bottom few pixels of the actual video test being played. The right side of the sliver of pixels should be actively displaying the static which is played by default in the video test. When moving the blank window that pops up the pixels which display the static should move too.

Now set the resolution of both monitors to 1024x768 and repeat the command above and you'll notice the video works fine. If you switch from xvimagesink to ximagesink the video should play back just fine.  This leads me to believe there is a bug between XVideo and the intel driver.