The graphics stack in Ubuntu 11.10 is largely in good shape. Ubuntu 11.10 is shipping with the Linux 3.0 kernel, which is still the latest stable series, but about to be succeeded by the Linux 3.1 kernel.
There isn't too many exciting changes in the graphics DRM for Linux 3.1, but one change that would have been nice to see back-ported to the Oneiric kernel is the self-generating FUC support for Nouveau. Ubuntu 11.10 is the first release of the Canonical operating system that ships with the Nouveau Gallium3D driver by default (previously it was only the Nouveau DRM and DDX for 2D/X-Video and KMS support), but there is no 3D support for the latest NVIDIA GeForce 400/500 "Fermi" series. The Linux 3.0 kernel needs the FUC micro-code for hardware acceleration. There is no freely re-distributable FUC micro-code (plus it's ASIC specific), so interested users need to first load the NVIDIA binary driver and then use MMIOtrace to generate their own FUC dump. With the Linux 3.1 kernel, there is no need to do this as the open-source NVIDIA driver can generate the needed controller code itself, similar to earlier generations of NVIDIA GPUs in Nouveau. This lack of open-source 3D Fermi support in Ubuntu 11.10 isn't a huge loss, however, as there is at least Fermi KMS support and the NVIDIA binary driver can be easily installed to provide proper support for all of the hardware features. Additionally, the Nouveau upstream code still lacks Fermi re-clocking support and power management, so it doesn't make too much sense to use the open-source driver on GeForce 400/500 hardware in a production environment for the time being.
On the user-space side, Ubuntu 11.10 offers Mesa 7.11, which is the latest stable series. There's lots of changes that have turned up in Mesa Git master for Mesa 7.12 (or it might be Mesa 8.0 if Intel manages OpenGL 3.0 support before year's end), but this next Mesa release won't come before January. Those wanting to take advantage of these latest driver improvements and other work will need to be pulling from Mesa Git themselves or utilize the Ubuntu xorg-edgers PPA.
Ubuntu 11.10 is shipping with the latest binary drivers from NVIDIA and AMD. A pleasant change this time around is that in Oneiric from the Jockey program they are also offering up (optional) post-release driver updates. Now it will be much easier to fetch the latest proprietary drivers if you wish, or alternatively you can stick with the latest tested drivers as of the Oneiric release.
One of the driver caveats that I've discovered in recent days is that the Catalyst 11.8 (fglrx 8.88) driver as found in the Oneiric repository is rather borked for the Radeon HD 6000 "Northern Islands" series.
With three different HD 6000 series GPUs tested (I haven't tried any HD 6900 Cayman GPUs yet), the Catalyst 11.8 driver is easily locking up under Ubuntu within a matter of minutes or even when the Unity interface is loading. Hopefully this will be worked out in the coming Catalyst driver releases, which can then be obtained from the post-release updates. There's also still a few problems with some Radeon hardware and the Catalyst 11.8 driver when it comes to Unity / Compiz and the GNOME Shell, but those should be corrected by post-release Compiz and Catalyst driver updates.
Nearly three years after the hardware launch, continuing to be a bloody mess is the PowerVR-based Intel Poulsbo graphics. When running a CompuLab Fit-PC2 with Ubuntu 11.10, the stock graphics configuration goes kaput. The Poulsbo kernel driver gets loaded and the stock configuration of the X.Org Server in Oneiric tries to load the fbdev X.Org driver, which fails miserably. The VESA driver can be loaded instead, if first unloading the Poulsbo kernel driver and setting up xorg.conf to use vesa instead. Poulsbo hardware should just be avoided.
Another finding, or so I am told, is that the Intel Ivy Bridge support level in Ubuntu 11.10 isn't too great. There's also the needed pieces in place (a Linux kernel with supportive DRM, xf86-video-intel, and Mesa) and that Ivy Bridge is working on early hardware, but that it's not in an ideal state. This though isn't too surprising considering there's more Ivy Bridge work in the Linux 3.1 kernel and more work -- including feature-work -- that's queued up for Linux 3.2. There's still patches for various features (like triple monitor support) that are working their way out on the development lists and into the Git repositories. This may not be much of a problem though depending upon when Intel releases the Ivy Bridge hardware and whether it's close to the launch of Ubuntu 12.04 LTS, but at least the code is already in better standing than Intel Sandy Bridge from Ubuntu 10.10/11.04.
For more information see the earlier Ubuntu 11.10 articles or drop by the Phoronix Forums for the latest driver discussions. More benchmarks are also on the way.