I verified this. Lockup happens with 2.6.38, last one tested rc8-gfb62c00, but not with 2.6.37 with exactly same userspace. Needed to try the effect several times, as this time the lockup with 2.6.38 only happened shortly after the second activation of the effect.
Hmm, can you attach Xorg logs from both?
I'm guessing its either pageflipping or a later kernel allowing some feature of mesa to be used.
Dave.