Displacement Modifier problems Blender 2.5

What should I do to get rid of the displacement modifier artifacts on this gold bar? (see attached image). Blender version is 2.52.5 revision 29870 Windows 64-bit running on Win7 64-bit.

Modifier settings are as follows:

Subsurface (set to whatever level I think necessary for the particular render. I have noticed that the higher this is set, the more artifacts appear)

Displacement (Normal; UV; Midlevel = 0; Strength = -0.02; Vertex influence group set to the top vertices of the gold bar)

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The material is a raytraced mirror gold color with Gloss set to 0.930. The color isn’t yellow enough and so still needs tweaking. I have noticed that turning Gloss to 1 eliminates the artifacts, but the result is unrealistic and undesirable.

The displacement texture map is a simple black square with softened white text. In the texture panel it is unchecked and is not being applied to the gold material.

In the UV unwrap, the top faces of the gold bar are Projected from View, and the rest of the faces are welded together and placed over a black portion of the displacement texture.

I have noticed that turning off Anti-Aliasing eliminates the artifacts, but that is not a viable solution.

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Bump/Update:

The artifacts become much worse when adding a second Subsurface modifier after the Displacement modifier (see attached image).

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blender 2.5 r29458, linux mint 32bit, I can’t replicate the bug…
I tried to use all the same settings.

however, have you tried using full sample antialiasing? (FSA)

Thanks for trying to replicate it. I haven’t tried FSA yet, I’ll get back in a bit on how it works. Also, I forgot to mention the build I am using, it is a Windows 64-bit revision 29870 running on Win7 Home Premium 64-bit.

FSA does not improve things, unfortunately. I think I’ll try rendering with no anti-aliasing at a very high resolution and then resizing the image in Photoshop. That’s a pretty nasty workaround, but I don’t really see any other way.