The corruption you're seeing is uninitialized memory. There can be a lot of different underlying causes for this. There might be some kernel options that might result in working around it (e.g. using UMS instead of KMS via the nomodeset option), however those are all just workarounds, and it's hard to guess which would work.
Instead, let me explain how to file a bug report and get it fixed for real:
- Go to bugs.freedesktop.org and register an account
Open a bug report. Here's a link with the component pre-filled:
https://bugs.freedesktop.org/enter_bug.cgi?product=xorg&component=Driver/Radeon
Set Version to '7.7' or git
- Set Severity, Hardware, and OS as appropriate
- Summary should be something like "[HD 5800] Framebuffer corruption shown when VT switching in Fedora 16"
- In the Description, start with a short summary of the problem, no more than 2-3 sentences. Then put a full description (e.g. cut and paste what you wrote here).
- Identify characteristics of the problem:
- Roughly when did it first start appearing? Or has it always been that way?
- Does it happen every time? If not, what proportion of the time does it happen?
- After reproducing the problem, collect 'dmesg > dmesg.txt', /var/log/Xorg.0.log, 'lspci -vvnn > lspci.txt', and a couple photos of the screen showing the corruption. Attach all of these to the bug report.
- Follow up on any requests by the upstream developers