OK, I've got a similar problem. I'm running on Debian unstable (which is essentially the same as Ubuntu), with a dual-boot to Windows XP. I've got an old Athlon 1.7GHz with an nForce motherboard. (No, I'm not l337. I'm a programmer.)
When Debian updated, so did I. I lost my nVidia drivers at the same time. I tried to upgrade, but couldn't, due to that GPL error. I downloaded the kernel source, modified paravirt.c to change EXPORT_SYMBOL_GPL to EXPORT_SYMBOL, copied the standard Debian kernel config, and recompiled. But the standard Debian packages won't install; something about overwriting glx.so. So I'm using the standard nVidia installer instead.
So much for the setup.
When I run the "nv" driver, everything is fine, but slow, and my kids like their games too much to endure that situation.
When I run the 9613 driver from the nVidia download page, I get screen corruption. The splash screen is beautiful, but GDM has chunks of un-redrawn screen. It's definitely a redraw problem: when I log in, it does a complete redraw that looks fine. But once the XFCE4 splash screen goes away, pieces of it are left behind. Dragging a window leaves its edges behind, and sometimes loses the window decorations, too. A screenshot, bug report, and xorg.conf (all tagged "default") are attached.
When I tweak the configuration as described in this forum, there are no detectable changes. (I used /etc/init.d/gdm restart to re-read the conf file and restart the X server.) A bug report and xorg.conf (tagged "tweaked") are attached.
When I run the 7185 driver from the nVidia download page, everything runs as expected. (No bug report attached.
I can make one if you want it.)
Windows is running an older driver, but it works fine, too.
All told, it looks like the hardware is not the problem, since it works under some drivers. It appears there's a bug in the new driver, perhaps some feature that my old hardware just doesn't support.
If there's anything else I can provide for your debugging, just let me know.