Comment 3 for bug 325115

Thanks for reporting this. I tracked this down to a regression in the X server caused by commit 56f6fb [randr: Avoid re-querying the configuration on everything but GetScreenResources]. The problem is that the DIX and DDX get out of sync with respect to the mode pool, so the DDX knows about the new configuration but the DIX doesn't. I started a thread about it on the X.org mailing list, so hopefully it'll get resolved before 1.6 comes out. In the meantime, you can work around the problem by hitting the apply button, dismissing the failure dialog, running "xrandr" in a terminal window, and then hitting the apply button again.

http://lists.freedesktop.org/archives/xorg/2009-February/043402.html