Monika, I'm curious if you would also be able to get it working if, when 
editing xorg.conf, you leave the driver set to 'ati' but just disable dri. 
(well, the setting of 'glx' didn't matter for me) Or, if by chance your bios 
AGP speed is forced to 8x, try setting it to auto or 4x? (- then the live cd 
might work with no need to adjust xorg.conf)
 
I know you're probably sick of trying more 'fixes', but I was curious because 
your symptoms were exactly the same as mine (as far as I can see), and either 
of the two tweaks I mentioned work for me and are nicer than using vesa.

Good luck everyone :)

-- 
[edgy][regression][rv280] black screen and console freeze when X starts - drm 
lockup
https://launchpad.net/bugs/67487

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