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Karmic is an unstable version, intel graphics are currently under heavy developent in Karmic if I'[m not mistaken, which means that updating was probably a bad idea while it's still on alpha 2. Can you give the output of lspci?
At the end of the day, the easiest way to fix a problem in Karmic is to switch back to Jaunty or wait till it's released. Three months early? There are going to be major problems with it. That's why it's an alpha.
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