1Gb of memory is not enough for modern mainstream distros. And your video card is exotic, which is a linux bugger number one.
Unity can no more work in 2D mode properly. I guess you should try to switch to Xubuntu. You can do it without reinstallation. Lots of guides on the net. In XFCE, do turn off 3D composition, if any will be.
If this doesn't help, you better change Ubuntu to something more straightforward. You may try Gentoo if you have some time. It is not as scary as people say. Just follow installation guide line-by-line, and use genkernel all
and proper profile. KDE can still work great in unaccelerated video mode. And Gentoo nedds much less RAM.