To Jadd: Yes, the latest xserver-xorg-video-ati  with this bug fix is 
integrated in the present live CD(20071008). I can also boot directly to gnome.
To Haran:Thank you for taking time to report the bug. But it seems to me that 
you have different kind of bug. This bug is blank screen at startup. You have 
'garbled' button problem. You must find or filled a new bug report for your 
issue. This bug report 144297 is going to be close soon.

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[RC410] Xpress 200m with pci id 1002:5a62 and Linux 2.6.22 - X will not start
https://bugs.launchpad.net/bugs/144297
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