i have also been affected by this bug, but i think it is not from xserver-xorg-video-intel. instead i believe it is due to some change in the kernel.
i have a core i5 based system using the integrated graphics, on a p8h67-m pro motherboard. i am running 12.04.
when an update came out in mid-march, the system would have constant crashes and hangs upon loggin in to the desktop. the characteristic behavior of the bug is that there will be graphics glitches, such as flashing, text changing to gibberish, temporary hangs that may recover--but sometimes don't. however, the mouse pointer always works.

i tried a few things to help isolate the bug, such as reformating and reinstalling ubuntu, trying different versions of xserver-xorg-video-intel, and different versions of the kernel.
the version of xserver-xorg-video-intel does not affect the behavior (at least compared between the original version in 12.04, which is 2:2-17.0-1ubuntu4.1, and the updated version, which is 2:2-17.0-1ubuntu4.3).
64 bit vs. 32 bit install of ubuntu 12.04 does not affect the behavior.

what does cause the crashing is using a recent kernel, especially 3.2.0-39-generic, but 3.5.0-23 also has the bad behavior.
in contrast, the original kernel from 12.04 (3.2.0-29-generic) is rock-solid stable.
kernels in between these 2 seemed hit or miss: up to 3.2.0-32 appear stable, but later kernels sometimes would hang at boot (at the purple screen after grub), or hang while running, while other times they would behave ok. however, 3.2.0-39 is terrible.

booting into a virtual terminal (text mode) is stable even with the new kernels.

i did manage to catch some errors in one of the sessions (either kernel 3.5.0-23 or 3.2.0-39, not sure which) in the xorg.log--here is the section (these were just after the modelines):

(EE) [mi] EQ overflowing.  Additional events will be discarded until existing events are processed.
(EE) 
(EE) Backtrace:
(EE) 0: /usr/bin/X (xorg_backtrace+0x49) [0xbba289]
(EE) 1: /usr/bin/X (mieqEnqueue+0x223) [0xb98633]
(EE) 2: /usr/bin/X (0xa03000+0x52a05) [0xa55a05]
(EE) 3: /usr/bin/X (xf86PostMotionEventM+0x25f) [0xa951cf]
(EE) 4: /usr/lib/xorg/modules/input/evdev_drv.so (0x2ec000+0x3cad) [0x2efcad]
(EE) 5: /usr/lib/xorg/modules/input/evdev_drv.so (0x2ec000+0x528f) [0x2f128f]
(EE) 6: /usr/bin/X (0xa03000+0x80a21) [0xa83a21]
(EE) 7: /usr/bin/X (0xa03000+0xae818) [0xab1818]
(EE) 8: (vdso) (__kernel_sigreturn+0x0) [0xeae400]
(EE) 9: (vdso) (__kernel_vsyscall+0x2) [0xeae416]
(EE) 10: /lib/i386-linux-gnu/libc.so.6 (ioctl+0x19) [0xd2cad9]
(EE) 11: /usr/lib/i386-linux-gnu/libdrm.so.2 (drmIoctl+0x34) [0x50c9a4]
(EE) 12: /usr/lib/i386-linux-gnu/libdrm_intel.so.1 (0x2b3000+0x899d) [0x2bb99d]
(EE) 13: /usr/lib/i386-linux-gnu/libdrm_intel.so.1 (drm_intel_bo_mrb_exec+0x4a) [0x2b530a]
(EE) 14: /usr/lib/xorg/modules/drivers/intel_drv.so (0x187000+0xbb68) [0x192b68]
(EE) 15: /usr/lib/xorg/modules/drivers/intel_drv.so (0x187000+0x11e1d) [0x198e1d]
(EE) 16: /usr/lib/xorg/modules/drivers/intel_drv.so (0x187000+0x248fb) [0x1ab8fb]
(EE) 17: /usr/lib/xorg/modules/drivers/intel_drv.so (0x187000+0xf7bed) [0x27ebed]
(EE) 18: /usr/bin/X (0xa03000+0x133467) [0xb36467]
(EE) 19: /usr/bin/X (CompositeGlyphs+0xc4) [0xb22784]
(EE) 20: /usr/bin/X (0xa03000+0x12c4d6) [0xb2f4d6]
(EE) 21: /usr/bin/X (0xa03000+0x126971) [0xb29971]
(EE) 22: /usr/bin/X (0xa03000+0x3c46d) [0xa3f46d]
(EE) 23: /usr/bin/X (0xa03000+0x2991c) [0xa2c91c]
(EE) 24: /lib/i386-linux-gnu/libc.so.6 (__libc_start_main+0xf3) [0xc5f4d3]
(EE) 25: /usr/bin/X (0xa03000+0x29cd9) [0xa2ccd9]
(EE) 
(EE) [mi] These backtraces from mieqEnqueue may point to a culprit higher up the stack.
(EE) [mi] mieq is *NOT* the cause.  It is a victim.
[   129.920] (EE) intel(0): Detected a hung GPU, disabling acceleration.
[   129.920] (EE) intel(0): When reporting this, please include i915_error_state from debugfs and the full dmesg.
[   130.243] [mi] Increasing EQ size to 512 to prevent dropped events.
[   130.244] [mi] EQ processing has resumed after 27 dropped events.
[   130.244] [mi] This may be caused my a misbehaving driver monopolizing the server's resources.


please let me know how else i can help, because this bug prevents me from using ubuntu with a recent kernel. i am willing to try installing different kernels, different packages, reboot the computer multiple times--whatever it takes to fix this

::ann