I ran into this problem my self.  I can't comment on which of the to
mentioned causes it would be but i would lean towards driver. the Xorg
log shows it dieing on "init".  I don't have the box in my posession at
the moment so I can't attach the log.  I'll try to do that in case it
because useful.

Maybe this is fixed to some extent in Gutsy as I was able to install the
driver fine, the problem came when the machine restarted with the
S-Video cable installed.  This was the first time I restarted so it
looked like this box had a hardware issue for hours until I moved it
away from the TV to test it more.

-- 
Restricted Drivers Manager ATI + S-video cable
https://bugs.launchpad.net/bugs/112292
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