Mac OS 10.6.5 and Displaylink 1.6 beta 3 driver - It works!
 

After installing the latest 10.6.5 update today, I have not been able to get a snowy screen on my Macbook Pro i7.

Tested the following configurations:
Internal display with Intel graphics
Internal display with nVidia graphics
Internal display + external display
Internal display + external display + Displaylink

It works! So far...

Keep us posted. I'm not reinstalling the drivers just yet. Maybe I'm a pessimist, but I didn't see anything in the update (10.6.5) documentation that suggested it was going to solve this issue, so I'll wait a bit longer to see what happens to others.

There was the line
"address stability and performance of graphics applications and games"

I'll give it a try.

Upgraded this morning and everything has been working all day with graphics switching enabled. Excellent!

Anyone know if this is a result of apple working with displaylink, or just a coincidence? Hopefully the former.

Works for me as well
 

I updated to 10.6.5, then installed the latest (1.6 b3) displaylink drivers.
I am happy to report that I have not had to uninstall them!
The i5 Macbook Pro seems quite happy with and without it's external monitors.
I know this was apple's issue and not displaylink's, but it is good news for us.

As a side note, I also contacted the guys who make air display (streams a display to an ipad) and they are also reporting that 10.6.5 has worked for them too)