I posted in lavinog's thread also as we are seemingly having the same
symptoms with similarish hardware. I tried a few things that I described
in the thread.

To make it short.
Does not seem to matter if I use updates from xorg-edgers, natty proposed 
updates and kernel PPA, kernel 2.6.39.05.
- 11.04 LiveCD > reboot or poweroff as soon as X/GUI is started.
- Installed via alternate Install CD
- at GDM login within about 1 second reboot.
- in recovery mode as root, "X -configure" gives errors and fails
- in recovery mode as root, "startx" functions, get a desktop wallpaper and can 
add starters to the desktop.
- in X as root can add a starter for a terminal
- when as root starting unity from a terminal in X the Unity desktop works as 
it should (with effects and all)
- in recovery mode as rood, "gdm" command causes a reboot as soon as the GUI is 
loaded.
- Removed GDM, installed KDM/LXDE. KDM login screen ok, but as soon as logging 
in with my own username in any desktop environment > reboot.

So single user (recovery mode) is ok, but multi-user (normal mode)
fails?

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You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to xserver-xorg-video-ati in Ubuntu.
https://bugs.launchpad.net/bugs/779323

Title:
  Xorg reboots with non-fglrx driver

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