Desktop distorted after GUI upgrade to M8

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I am fairly new to linux, with Mint as my first real attempt to convert from Windows. Tonight I did an upgrade from Gloria to Helena (by GUI). After upgrading and rebooting, all seems ok (Mint logo, splash screen, mouse pointer) until the desktop appears. Apart from the mouse pointer, the desktop is completely distorted, built up by vertical lines. I can see shapes that resembles like some of the desktop icons behind the lines, but it is impossible to work. What has happened? Is there a solution?

I had a similar problem in Xubuntu 9.10, but only regarding composite graphics elements (like the notify-osd), which I could correct by tweaking the xorg.conf. Might it have something to do with that?

The image is not from my computer, but it looks fairly similar to what I have gotten:


I use an old laptop:
Compaq Evo N610c
Intel Pentium 4 1.8Ghz
512M DDR Ram (Max 2GB)
ATI Mobility Redeon 7500 Display W/16M Ram
14.1 1024 x 768 XGA TFT LCD

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I solved it and if anybody has the same problem, the solution is described here (the very last post on the page):
http://www.ubuntu.com/getubuntu/releasenotes/910

However, I used a slightly alternate method. You need another Linux OS on your computer, or a Live CD. My description is from Xubuntu:
1. Log into your alternate system.
2. Mount the hard disk with Linux Mint.
3. Edit xorg.conf in the Linux Mint hd as root. The file is located in /etc/X11/
4. Add the 'RenderAccel' option to /etc/X11/xorg.conf:
Section "Device"
...
Driver "radeon"
Option "RenderAccel" "off"
EndSection
5. Save xorg.conf, log out and restart your system. Presto, its working!

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Does anybody know if this issue is solved in the new M9?