[DigitALL]

I don't think that would work; IIRC the Live CD is based on Ubuntu Karmic instead of Lucid.

Is there a reason that you need the newer Ubuntu release?

No, not really. All I want is a working XBMC but with desktop, browser for net, email. Are there other options or this problem my be fixed in the near future and try to install it again?

But is interesting what you say because when looking in system/info I see kernel 2.6.32-24

[tslayer]

And you've obviously disabled desktop effects right? With Live, that is off by default.

Search forums for that.

[DigitALL]

Well, I didn't think of that tslayer. Thank you very much. I have disabled it.

Now this is the weirdest thing: I moved my HTPC during system and XBMC install where I have my other computers, so all the time I had it hooked up to a 24" monitor with a 1920x1200 resolution. The stable version 9.11 and live Dharma disk ran with no problems in terms of video but SVN 32789 and 33035 had these video choppy effect.
But as soon as I hooked it up to the TV (1920x1080), the video seems to be OK. Now I noticed there is a sound decoding problem that I have already filled a track ticket (http://trac.xbmc.org/ticket/9958).

[tslayer]

There are a million audio+hdmi threads. I suggest you go through them.