strange kwin(?) behavior on karmic cd

[pkaplan1 at comcast.net]

I'm trying to decide whether to upgrade (or do fresh install) a Thinkpad T41 (ATI) graphics from Jaunty to Karmic. 


I've been running KDE 4.3.2 since it appeared in the repos a month ago and haven't had any problems on Jaunty. 


However, on the live cd I'm having some real display problems....When kde first launches the plasma panel is garbled. All of the buttons seem to be active, but nothing is readable and there are a series of vertical lines at various points on the panel. Krunner is also garbled. Although if I guess where to click, it seems to accept input. Surprisingly if I activate Desktop effects, all of the problems seem to clear up; everything appears normal. If I inactivate Desktop effects, everything becomes garbled again. 


Although I like desktop effects, my machine has only 1 Mb RAM so sometimes I have to turn them off. It would seem that there might be a problem running karmic on this machine. 


Has anyone seen anything like this? Any thoughts on a config fix? 


TIA 
Paul 
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