Here is an excerpt from the latest ATI Catalyst driver released today,
note point 3.

The following section provides a brief description of known issues
associated with the latest version of ATI Catalystâ„¢ Linux software
suite. These issues include:

    * There is no support for video playback on the second head in dual head 
mode. Further details can be found in topic number 737-26985
    * Desktop corruption may be noticed when dragging the overlay/video when 
using dual-display mode. Further details can be found in topic number 737-29578
    * A black screen may be observed on some hardware when switching to the 
console or leaving the X window system when a Vesa framebuffer console driver 
is used. Further details can be found in topic number 737-30687
    * Video Playback may display wrong colors and additional shadow images when 
cropping or expanding a video file using a video player that utilizes the 
XVideo extension

Apparently ATI considers this a bug worthy of their attention, although
from what I know the issue is not an exclusively ATI issue.

Larry

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Blank ttys when using vesafb (vga=xxx)
https://bugs.launchpad.net/bugs/129910
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