I have seen these exact symptoms when installing custom Catalyst drivers 
(xorg-driver-fglrx, fglrx-kernel-source, and fglrx-amdcccle)
without first removing the Ubuntu restricted drivers. The fix:

1. Boot in recovery mode, and drop down to a root prompt with network access.
2. Purge the Catalyst drivers by running
      dpkg -P xorg-driver-fglrx fglrx-kernel-source fglrx-amdcccle
3. Remove all Ubuntu restricted drivers packages you have installed.
   To see the list of related packages, run
      dpkg -l 'linux-restricted-*'
   and then remove the installed ones, for example
      dpkg -r linux-restricted-modules-generic linux-restricted-modules-common 
linux-restricted-modules-2.6.28-13-generic
4. Download and/or build the desired Catalyst driver packages. For example,
      
https://edge.launchpad.net/~xorg-edgers/+archive/ppa/+files/xorg-driver-fglrx_8.620-0ubuntu1~jaunty_i386.deb
      
https://edge.launchpad.net/~xorg-edgers/+archive/ppa/+files/fglrx-kernel-source_8.620-0ubuntu1~jaunty_i386.deb
      
https://edge.launchpad.net/~xorg-edgers/+archive/ppa/+files/fglrx-amdcccle_8.620-0ubuntu1~jaunty_i386.deb
   If you download the (newer, 8.632) Catalyst installer from AMD, see
      http://wiki.cchtml.com/index.php/Ubuntu_Jaunty_Installation_Guide
   for detailed building information.
5. Install the desired Catalyst driver packages (xorg-driver-fglrx, 
fglrx-kernel-source, fglrx-amdcccle).
   For the example files above, run
      dpkg -i xorg-driver-fglrx_8.620-0ubuntu1~jaunty_i386.deb 
fglrx-kernel-source_8.620-0ubuntu1~jaunty_i386.deb 
fglrx-amdcccle_8.620-0ubuntu1~jaunty_i386.deb
6. Reboot by running
      sync ; reboot

To update custom Catalyst drivers, use the above sequence, but omit step 3.
Obviously step 4 can also be done first, before booting in recovery mode.

-- 
Desktop won't render (garbled) - after installing ATI Radeon Catalyst Control 
Center
https://bugs.launchpad.net/bugs/376741
You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to fglrx-installer in ubuntu.

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