I have the same(?) problem on Jaunty with a ATI Mobility Radeon M6 LY.
Using the latest package from tormodvolden's PPA, after login I get
horizontal gray and black stripes and on the black stripes in some areas
every second pixel shows the desktop. I'll try to make a photo...

The interesting thing is: The login screen is fine. The gray bars appear
after login. Also, when killing the X-Server using Ctrl-Alt-BckSpc, just
for a split of a second, the gray bars disappear and I can see my
background picture clearly for another split-second.

This only seems to happen with XAA acceleration. Using EXA, everything
looks fine (but is awful slow on my card).

Cheers,
  -mARKUS

-- 
[HD3650] cannot start gnome X in intrepid (gray screen with horizontal thin 
flashing black lines)
https://bugs.launchpad.net/bugs/272406
You received this bug notification because you are a member of Ubuntu-X,
which is the registrant for xserver-xorg-driver-ati.

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