Damn, I hadn't read the comments about compiz properly. Right, simply disabling 
compiz solves the issue, though you have to log in to gnome to do that. :-)
That means the LiveCD will be very broken.

So perhaps blacklisting r6xx/r7xx from running compiz is the right solution to 
this? Note that glxgear also crashes, so there's a problem with the system 
reporting that 3D is avaliable while it's not actually working.
Unless you import some code from http://www.botchco.com/agd5f/?p=47 
http://cgit.freedesktop.org/~agd5f/drm/log/?h=r6xx-r7xx-3d of cource which is 
probably what's missing.

-- 
Xserver crashes when logging in
https://bugs.launchpad.net/bugs/426159
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