i have this same system -- in my experience the VESA driver does not
even work acceptably, leaving a badly scrambled color palette after
switching back from a VT or after any change in screen resolution. as
far as i know the only solution at the moment is to install the fglrx
driver using ATI's installer. restricted-manager correctly detects that
the hardware is unsupported by the current fglrx packages, but exits
with a misleading error message. this bug should probably be moved to
one of the fglrx packages.

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Dell OEM ATI graphics chip not recognised by Restricted Drivers Manager
https://bugs.launchpad.net/bugs/186999
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