Fail to start X server on Live CD on NX9420 laptop

Laptop: HP Compaq nx9420 (video: ATI Radeon X1600 mobility)

1) Boot up the 7.04 final Live CD
2a) Choose: "Start or Install Ubuntu"
OR:
2b) Choose: "Start Ubuntu in safe graphics mode"

Systems loads the kernel, attempts and fails to start the X-server:

"Failed to start the X server (your graphical interface)....would you like to diagnose problem?"

3) Click "Yes" to diagnose problem

Shows the following backtrace:

0: /usr/X11R6/bin/X(xf86SigHandler+0x81) [0x80c5d91]
1: [0xffffe420]
2: /usr/X11R6/bin/X(InitOutput+0x9aa) [0x80a5b9a]
3: /usr/X11R6/bin/X(main+0x27b) [0x807456b]
4: /lib/tls/i686/cmov/libc/so.6(__libs_start_main+0xdc) [0xb7db2ebc]
5: /usr/X11R6/bin/X(FontFileCompleteXLFD+0x1e1) [0x8073ab1]

Fatal Server Error:
Caught Signal 11. Server Aborting