Do you have compiz/beryl desktop effects enabled? If so disable them in Preferences->Appearances->Visual Effects.
Fixed the problem for me with a 4850 mobility in my GT725, sucks, but ATI drivers blow hard for linux as in an advert for nVidia. I still get lockups when playing back video after awaking from sleep though.
As to the error, yeah I still see that in my logs as well, but it doesn't seem to cause any problems AFAIK, and turning off the desktop effects did the trick for me.
[EDIT]
At the time of the problem (and now) I never had a second machine to attempt to ssh in with, so I can't verify if the system was still up here w/X locked. But, have you tried killing the X server process, and then re-starting X?
(Not much of a solution for me anyways even if it works as the entire point of a notebook is to have a single mobile platform which generally implies no other machine capable of sshing to effect the workaround.)
[/EDIT]


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