Based on the description of the symptoms, it sort of sounds like this
might be caused by an incorrect AGPMode setting, which is relevant when
DRI is enabled.  You should test if changing this makes the issue go
away.

For KMS configurations, agpmode is a kernel module parameter.  Enter the
grub interface during boot and append radeon.agpmode=X to the kernel
boot line, where X = -1,1,2,4,8

1-8 are the agp modes,
-1 uses the onboard gpu gart (PCI, PCIE, etc.)

For details about this with UMS (non-KMS), please see the "ATI AGP Mode
Quirk" section at https://wiki.ubuntu.com/X/Quirks


** Summary changed:

- User switching breaks X-session(s)
+ [RV250] User switching breaks X-session(s)

** Changed in: xserver-xorg-video-ati (Ubuntu)
       Status: Confirmed => Incomplete

-- 
[RV250] User switching breaks X-session(s)
https://bugs.launchpad.net/bugs/565835
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