The code that looks for the brightness_in_hardware property is essentially:

gpm_hal_find_device_capability ("laptop_panel", &names);
res = gpm_hal_device_get_bool (names[0],
			       "laptop_panel.brightness_in_hardware",
			       &brightness->priv->does_own_updates);

However... the hal property is on the root computer object, not on the actual panel, when i run (on an IBM x31) I get:

[gpm_hal_device_get_bool] gpm-hal.c:358 (20:22:18):      No property laptop_panel.brightness_in_hardware on device with id /org/freedesktop/Hal/devices/acpi_brightness

I'll attach my lshal output - perhaps the hal property is in the wrong place.

FWIW, I added the .fdi part of hal into my normal ubuntu distro, the part of the fdi file I backported is:

(I added a file /usr/share/hal/fdi/policy/10osvendor/10-laptop-panel-mgmt-policy-crispin.fdi)

<?xml version="1.0" encoding="ISO-8859-1"?> <!-- -*- SGML -*- -->

<deviceinfo version="0.2">

  <!-- On some borken laptops, the brightness control is all done in hardware
       but the hardware also synthesizes keypresses when the brightness is
       changed. This gives power manager software problems as the brightness
       can get into a feedback state so the panel flashes uncontrollably.
       This is a hardware "feature" seen on IBM x31 laptops. -->
  <device>
    <match key="smbios.system.manufacturer" string="IBM">
      <match key="smbios.system.version" string="ThinkPad X31">
        <merge key="laptop_panel.brightness_in_hardware" type="bool">true</merge>
      </match>
    </match>
  </device>
  <device>

</deviceinfo>