Quick addition to my previous blog post:
If you have an xorg.conf that references evdev devices, these will generate duplicate events with the recent changes (they get added twice). Just get rid of the matching entry in your xorg.conf (you most likely don't need it anyway).
Otherwise, add Option "GrabDevice" "True" to the respective input device. This way you restore the old behaviour that forces a kernel grab. But then again, having the device in your xorg.conf devoids you of any hotplugging (for this device) anyway, so what's the point.
There was one thing I missed when testing: if you can CTRL+C the server or VT switch with Alt+cursor keys, then update to xorg-x11-server-1.5.2-6. A one-line fix that is needed if no xorg.conf is present.