I'm experiencing a similar problem, Intel E8400 and Asus 3850 video
card, fglrx driver.

The ati driver works fine, installing the fglrx driver causes a black
screen (and what looks like) a hard lock-up on logout, switch user, and
when X is started. This is on Kubuntu 8.04.1 with all updates applied.

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[fglrx] freezes upon Logout or Switch user [patch]
https://bugs.launchpad.net/bugs/118605
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