Update 3 Jun 2007: The latest Ubuntu feisty kernel (2.6.20-16.28) now has fixed support, so this workaround shouldn't be needed.
Anyway as a few people seem to be experiencing the problem I thought I'd rebuild the Ubuntu kernel with the fix as it's easier to run the Ubuntu kernel. Mainly because running a kernel compiled yourself on Ubuntu seems to end up with random things breaking, hopefully this will save some other people from having to compile a kernel themselves too.
Assuming you are using feisty (7.04) once you've installed Ubuntu, download this kernel-image package (23M) and install it (dpkg -i linux-image-2.6.20-15-generic_2.6.20-15.27dgl_i386.deb).
Combined with this and installing 915resolution (I didn't even have to configure it, simply installing it was enough) the laptop seems to be working perfectly, including wireless, fn keys and suspend which is definitely progress over a few years ago, especially for a budget laptop!
: Note: to run the live CD installer without a mouse, press Alt+F2 to open the run dialog, then type ubiquity, it's just about usable with the keyboard tab refused to change the focus in the timezone selection, Alt+f for forward seemed to work though. It might be easier to plug a USB mouse in though..