The close source driver support a Texture overlay.
It is better than the blitter one and need less work than the overlay one.
It could be interesting to add it for nv17-n2x cards.
It appears that this bug report has laid dormant for quite a while. Sorry we haven't gotten to it. Since we fix bugs all the time, chances are pretty good that your issue has been fixed with the latest software. Please give it a shot. (Linux kernel 3.10.7, xf86-video-nouveau 1.0.9, mesa 9.1.6, or their git versions.) If upgrading to the latest isn't an option for you, your distro's bugzilla is probably the right destination for your bug report.
In an effort to clean up our bug list, we're pre-emptively closing all bugs that haven't seen updates since 2011. If the original issue remains, please make sure to provide fresh info, see http://nouveau.freedesktop.org/wiki/Bugs/ for what we need to see, and re-open this one.
The Nouveau Team