Unfortunately, this bug is still there in Ubuntu Hardy Heron Alpha 5. Both the login screen (gdm) and the desktop panels do not show up correctly. Regarding the latter, see the attached screenshot.

My laptop contains the Santa Rosa Platform with the intel i965 graphics chipset. The problem seems to be the interfering TV output as can seen by the output of xrandr:

 ubuntu@ubuntu:~$ xrandr
Screen 0: minimum 320 x 200, current 1280 x 800, maximum 1280 x 1280
VGA disconnected (normal left inverted right x axis y axis)
LVDS connected 1280x800+0+0 (normal left inverted right x axis y axis) 286mm x 179mm
   1280x800       59.9*+   60.0  
   1280x768       60.0  
   1024x768       60.0  
   800x600        60.3  
   640x480        59.9  
TV connected 1024x768+0+0 (normal left inverted right x axis y axis) 0mm x 0mm
   1024x768       30.0* 
   800x600        30.0  
   848x480        30.0  
   640x480        30.0  
ubuntu@ubuntu:~$

As can be seen, the native resolution of the screen is 1280x800 while the TV ouput is at 1024x768. As can be seen on the screenshot, the panels are confined to the latter resolution, while the wallpaper spans the native resolution. The funny thing is that this laptop does not even have a TV output.

Here is the ouput of lspci:

ubuntu@ubuntu:~$ lspci
00:00.0 Host bridge: Intel Corporation Mobile PM965/GM965/GL960 Memory Controller Hub (rev 03)
00:02.0 VGA compatible controller: Intel Corporation Mobile GM965/GL960 Integrated Graphics Controller (rev 03)
00:02.1 Display controller: Intel Corporation Mobile GM965/GL960 Integrated Graphics Controller (rev 03)
00:1a.0 USB Controller: Intel Corporation 82801H (ICH8 Family) USB UHCI Contoller #4 (rev 03)
00:1a.1 USB Controller: Intel Corporation 82801H (ICH8 Family) USB UHCI Controller #5 (rev 03)
00:1a.7 USB Controller: Intel Corporation 82801H (ICH8 Family) USB2 EHCI Controller #2 (rev 03)
00:1b.0 Audio device: Intel Corporation 82801H (ICH8 Family) HD Audio Controller (rev 03)
00:1c.0 PCI bridge: Intel Corporation 82801H (ICH8 Family) PCI Express Port 1 (rev 03)
00:1c.2 PCI bridge: Intel Corporation 82801H (ICH8 Family) PCI Express Port 3 (rev 03)
00:1c.3 PCI bridge: Intel Corporation 82801H (ICH8 Family) PCI Express Port 4 (rev 03)
00:1c.4 PCI bridge: Intel Corporation 82801H (ICH8 Family) PCI Express Port 5 (rev 03)
00:1d.0 USB Controller: Intel Corporation 82801H (ICH8 Family) USB UHCI Controller #1 (rev 03)
00:1d.1 USB Controller: Intel Corporation 82801H (ICH8 Family) USB UHCI Controller #2 (rev 03)
00:1d.2 USB Controller: Intel Corporation 82801H (ICH8 Family) USB UHCI Controller #3 (rev 03)
00:1d.7 USB Controller: Intel Corporation 82801H (ICH8 Family) USB2 EHCI Controller #1 (rev 03)
00:1e.0 PCI bridge: Intel Corporation 82801 Mobile PCI Bridge (rev f3)
00:1f.0 ISA bridge: Intel Corporation 82801HEM (ICH8M) LPC Interface Controller (rev 03)
00:1f.1 IDE interface: Intel Corporation 82801HBM/HEM (ICH8M/ICH8M-E) IDE Controller (rev 03)
00:1f.2 SATA controller: Intel Corporation 82801HBM/HEM (ICH8M/ICH8M-E) SATA AHCI Controller (rev 03)
00:1f.3 SMBus: Intel Corporation 82801H (ICH8 Family) SMBus Controller (rev 03)
01:00.0 Ethernet controller: Marvell Technology Group Ltd. 88E8056 PCI-E Gigabit Ethernet Controller (rev 12)
02:00.0 SATA controller: JMicron Technologies, Inc. JMicron 20360/20363 AHCI Controller (rev 02)
03:00.0 Network controller: Intel Corporation PRO/Wireless 4965 AG or AGN Network Connection (rev 61)
06:01.0 FireWire (IEEE 1394): Ricoh Co Ltd R5C832 IEEE 1394 Controller (rev 05)
06:01.1 SD Host controller: Ricoh Co Ltd R5C822 SD/SDIO/MMC/MS/MSPro Host Adapter (rev 22)
06:01.2 System peripheral: Ricoh Co Ltd R5C843 MMC Host Controller (rev 12)
06:01.3 System peripheral: Ricoh Co Ltd R5C592 Memory Stick Bus Host Adapter (rev ff)
ubuntu@ubuntu:~$