Comment 8 for bug 172312

Hello. I found lame solution for this issure.
Its work for me:

Add kernel option

reserve=0xCE000000,0x1FFFFFF

Then system boots fine and

glxinfo | grep direc
direct rendering: Yes

Extra post in my blog (in russian)
http://www.skillz.ru/dev/m1sc/article-Ubuntu_7_10_linux_kernel_2_6_22_vs_NVIDIA_8600_GT.html