Update (with some kind of solution): 
What I have tried so far:
- Disabling KMS explicitly at grub prompt: no change
- Disabling vesafb: blank screen
- Disabling Plymouth: no change

Another thing I tried right now, was installing the AMD Catalyst 12.11
Beta 8 driver. So far (tested it with 6 or 7 reboots) it seems to work.
Also switching users works again (but there are some quirks if you try
to switch back to the first user again. You have to use ctrl-alt-F7, but
that can be a general problem and may be not related to the fglrx driver
as it seems to switch to the wrong console if one uses "Switch User" in
the xfce menu).

Long story short: No graphic errors and no visible VT cursor so far.

What one has to do after installing the beta driver, is editing the file 
/etc/ati/signature
After the installation of the beta driver, one gets an unpleasant watermark in 
the lower right corner of the screen which tells that the driver is for testing 
purposes only. To get rid of this, edit the mentioned file and replace the 
content with

9777c589791007f4aeef06c922ad54a2:ae59f5b9572136d99fdd36f0109d358fa643f2bd4a2644d9efbb4fe91a9f6590a145:f612f0b01f2565cd9bd834f8119b309bae11a1ed4a2661c49fdf3fad11986cc4f641f1ba1f2265909a8e34ff1699309bf211a7eb4d7662cd9f8e3faf14986d92f646f1bc

(all in one line)

Hope that helps!

-- 
You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to fglrx-installer in Ubuntu.
https://bugs.launchpad.net/bugs/1067320

Title:
  1002:6798 [fglrx] VT cursor is visible and blinking on top of Unity
  Radeon HD 7970 and 5450

To manage notifications about this bug go to:
https://bugs.launchpad.net/ubuntu/+source/fglrx-installer/+bug/1067320/+subscriptions

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