hal-device-manager crashed with internal error failing to initialize Hal!

Binary package hint: hal

After installing ATI proprietary driver 8.39.4 on kernel 2.6.22-9 couldn't load fglrx driver.
Typing at terminal prompt line "gdm --replace" could start graphical interface but with a crash detail of << Internal error - failed to initialize Hal! >>

Binary package hint: hal

call for hal manager crashed after adept upgrade of hal stuff. usb stick reading is not possible

marcos@linux-ubuntu:~$ lspci
00:00.0 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.1 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.2 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.3 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.4 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.7 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:01.0 PCI bridge: VIA Technologies, Inc. VT8237 PCI bridge [K8T800/K8T890 South]
00:0b.0 Multimedia video controller: Brooktree Corporation Bt878 Video Capture (rev 11)
00:0b.1 Multimedia controller: Brooktree Corporation Bt878 Audio Capture (rev 11)
00:0d.0 Ethernet controller: 3Com Corporation 3c905C-TX/TX-M [Tornado] (rev 74)
00:0e.0 Multimedia audio controller: Creative Labs SB Live! EMU10k1 (rev 05)
00:0e.1 Input device controller: Creative Labs SB Live! Game Port (rev 05)
00:0f.0 RAID bus controller: VIA Technologies, Inc. VIA VT6420 SATA RAID Controller (rev 80)
00:0f.1 IDE interface: VIA Technologies, Inc. VT82C586A/B/VT82C686/A/B/VT823x/A/C PIPC Bus Master IDE (rev 06)
00:10.0 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.1 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.2 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.3 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.4 USB Controller: VIA Technologies, Inc. USB 2.0 (rev 86)
00:11.0 ISA bridge: VIA Technologies, Inc. VT8237 ISA bridge [KT600/K8T800/K8T890 South]
00:11.5 Multimedia audio controller: VIA Technologies, Inc. VT8233/A/8235/8237 AC97 Audio Controller (rev 60)
00:11.6 Communication controller: VIA Technologies, Inc. AC'97 Modem Controller (rev 80)
00:12.0 Ethernet controller: VIA Technologies, Inc. VT6102 [Rhine-II] (rev 78)
00:18.0 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] HyperTransport Technology Configuration
00:18.1 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] Address Map
00:18.2 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] DRAM Controller
00:18.3 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] Miscellaneous Control
01:00.0 VGA compatible controller: ATI Technologies Inc RV350 AR [Radeon 9600]
01:00.1 Display controller: ATI Technologies Inc RV350 AR [Radeon 9600] (Secondary)
marcos@linux-ubuntu:~$
marcos@linux-ubuntu:~$ lspci
00:00.0 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.1 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.2 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.3 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.4 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:00.7 Host bridge: VIA Technologies, Inc. K8T800Pro Host Bridge
00:01.0 PCI bridge: VIA Technologies, Inc. VT8237 PCI bridge [K8T800/K8T890 South]
00:0b.0 Multimedia video controller: Brooktree Corporation Bt878 Video Capture (rev 11)
00:0b.1 Multimedia controller: Brooktree Corporation Bt878 Audio Capture (rev 11)
00:0d.0 Ethernet controller: 3Com Corporation 3c905C-TX/TX-M [Tornado] (rev 74)
00:0e.0 Multimedia audio controller: Creative Labs SB Live! EMU10k1 (rev 05)
00:0e.1 Input device controller: Creative Labs SB Live! Game Port (rev 05)
00:0f.0 RAID bus controller: VIA Technologies, Inc. VIA VT6420 SATA RAID Controller (rev 80)
00:0f.1 IDE interface: VIA Technologies, Inc. VT82C586A/B/VT82C686/A/B/VT823x/A/C PIPC Bus Master IDE (rev 06)
00:10.0 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.1 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.2 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.3 USB Controller: VIA Technologies, Inc. VT82xxxxx UHCI USB 1.1 Controller (rev 81)
00:10.4 USB Controller: VIA Technologies, Inc. USB 2.0 (rev 86)
00:11.0 ISA bridge: VIA Technologies, Inc. VT8237 ISA bridge [KT600/K8T800/K8T890 South]
00:11.5 Multimedia audio controller: VIA Technologies, Inc. VT8233/A/8235/8237 AC97 Audio Controller (rev 60)
00:11.6 Communication controller: VIA Technologies, Inc. AC'97 Modem Controller (rev 80)
00:12.0 Ethernet controller: VIA Technologies, Inc. VT6102 [Rhine-II] (rev 78)
00:18.0 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] HyperTransport Technology Configuration
00:18.1 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] Address Map
00:18.2 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] DRAM Controller
00:18.3 Host bridge: Advanced Micro Devices [AMD] K8 [Athlon64/Opteron] Miscellaneous Control
01:00.0 VGA compatible controller: ATI Technologies Inc RV350 AR [Radeon 9600]
01:00.1 Display controller: ATI Technologies Inc RV350 AR [Radeon 9600] (Secondary)
marcos@linux-ubuntu:~$ fglrxinfo
Xlib: extension "XFree86-DRI" missing on display ":0.0".
display: :0.0 screen: 0
OpenGL vendor string: Mesa project: www.mesa3d.org
OpenGL renderer string: Mesa GLX Indirect
OpenGL version string: 1.4 (2.1 Mesa 7.0)

My xorg.conf file:

# xorg.conf (xorg X Window System server configuration file)
#
# This file was generated by dexconf, the Debian X Configuration tool, using
# values from the debconf database.
#
# Edit this file with caution, and see the xorg.conf manual page.
# (Type "man xorg.conf" at the shell prompt.)
#
# This file is automatically updated on xserver-xorg package upgrades *only*
# if it has not been modified since the last upgrade of the xserver-xorg
# package.
#
# If you have edited this file but would like it to be automatically updated
# again, run the following command:
# sudo dpkg-reconfigure -phigh xserver-xorg

Section "Files"
EndSection

Section "InputDevice"
 Identifier "Generic Keyboard"
 Driver "kbd"
 Option "CoreKeyboard"
 Option "XkbRules" "xorg"
 Option "XkbModel" "abnt2"
 Option "XkbLayout" "br"
EndSection

Section "InputDevice"
 Identifier "Configured Mouse"
 Driver "mouse"
 Option "CorePointer"
 Option "Device" "/dev/input/mice"
 Option "Protocol" "ImPS/2"
 Option "ZAxisMapping" "4 5"
 Option "Emulate3Buttons" "true"
EndSection

Section "InputDevice"
 Driver "wacom"
 Identifier "stylus"
 Option "Device" "/dev/input/wacom"
 Option "Type" "stylus"
 Option "ForceDevice" "ISDV4" # Tablet PC ONLY
EndSection

Section "InputDevice"
 Driver "wacom"
 Identifier "eraser"
 Option "Device" "/dev/input/wacom"
 Option "Type" "eraser"
 Option "ForceDevice" "ISDV4" # Tablet PC ONLY
EndSection

Section "InputDevice"
 Driver "wacom"
 Identifier "cursor"
 Option "Device" "/dev/input/wacom"
 Option "Type" "cursor"
 Option "ForceDevice" "ISDV4" # Tablet PC ONLY
EndSection

Section "Device"
 Identifier "ATI Technologies Inc RV350 AR [Radeon 9600]"
 Driver "ati"
 BusID "PCI:1:0:0"
EndSection

Section "Extensions"
 Option "Composite" "0"
EndSection

Section "Monitor"
 Identifier "SyncMaster"
 Option "DPMS"
 HorizSync 30-81
 VertRefresh 56-75
EndSection

Section "Screen"
 Identifier "Default Screen"
 Device "ATI Technologies Inc RV350 AR [Radeon 9600]"
 Monitor "SyncMaster"
 DefaultDepth 24
 SubSection "Display"
  Depth 1
  Modes "1280x1024" "1152x864" "1024x768" "800x600" "640x480"
 EndSubSection
 SubSection "Display"
  Depth 4
  Modes "1280x1024" "1152x864" "1024x768" "800x600" "640x480"
 EndSubSection
 SubSection "Display"
  Depth 8
  Modes "1280x1024" "1152x864" "1024x768" "800x600" "640x480"
 EndSubSection
 SubSection "Display"
  Depth 15
  Modes "1280x1024" "1152x864" "1024x768" "800x600" "640x480"
 EndSubSection
 SubSection "Display"
  Depth 16
  Modes "1280x1024" "1152x864" "1024x768" "800x600" "640x480"
 EndSubSection
 SubSection "Display"
  Depth 24
  Modes "1280x1024" "1152x864" "1024x768" "800x600" "640x480"
 EndSubSection
EndSection

Section "ServerLayout"
 Identifier "Default Layout"
 Screen "Default Screen"
 InputDevice "Generic Keyboard"
 InputDevice "Configured Mouse"
 InputDevice "stylus" "SendCoreEvents"
 InputDevice "cursor" "SendCoreEvents"
 InputDevice "eraser" "SendCoreEvents"
EndSection

ProblemType: Crash
Architecture: i386
Date: Tue Jul 31 23:30:14 2007
DistroRelease: Ubuntu 7.10
ExecutablePath: /usr/bin/hal-device-manager
InterpreterPath: /usr/bin/python2.5
NonfreeKernelModules: fglrx
Package: hal-device-manager 0.5.9.1-1ubuntu2
PackageArchitecture: all
ProcCmdline: python /usr/bin/hal-device-manager
ProcCwd: /home/marcos
ProcEnviron:
 PATH=/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin:/usr/games
 LANG=C
 SHELL=/bin/bash
PythonArgs: ['/usr/bin/hal-device-manager']
SourcePackage: hal
Title: hal-device-manager crashed with DBusException in __new__()
Uname: Linux linux-ubuntu 2.6.22-9-generic #1 SMP Mon Jul 30 18:00:27 GMT 2007 i686 GNU/Linux