I use this chipset family on one of my MDs. Works great.
Upgrading your kernel is typically a very very bad idea.
Please give me the output of lspci -nnk | grep VGA -A3
01:05.0 VGA compatible controller : Advanced Micro Devices [AMD] nee ATI RS690 [Radeon X1200 Series] [1002:791e]
Kernel driver in use: radeon
Kernel modules: radeon
is mine. Now... the Xpress series had support dropped for it a long time ago by ATI... so the radeon is the best we are going to be able to do. Going to want to run ui2 no alpha and turn off photo screen saver for best performance... but I will look into a workaround for your specific problem once you get me that info. I would, frankly, not expect to see this problem. That bug relates to multiple monitors, which is unsupported in LMCE.