Try booting the ISO with "live video=ofonly" I've had to do this with my
iMac G5 as well.

Note, this bug may be a kernel bug, but I've assigned it to the radeon
Xorg driver for now. I'll look into later.

** Changed in: xserver-xorg-video-ati (Ubuntu)
   Importance: Undecided => High

** Changed in: xserver-xorg-video-ati (Ubuntu)
    Milestone: None => ubuntu-12.10-beta-2

** Changed in: xserver-xorg-video-ati (Ubuntu)
     Assignee: (unassigned) => Ben Collins (ben-collins)

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https://bugs.launchpad.net/bugs/1046951

Title:
  No desktop environment or window manager, just X with the mouse

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