Thanks for your report and the debug logs.
For the garbled screen issue, we are analysing your logs. I let you know the results. The suspect is another Lion issue regarding your specific Mac model.
As for the dragging issue, unfortunately this is a known Apple bug for your specific model. The 1.7b5 driver has a workaround for this, but to enable it you must change your security settings (change required password ->immediately to at least 5 secs) and restart your mac. Have you already tried this?
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