Comment 27 for bug 699802

I too hit this problem with my old Thinkpad T41 with radeon 9000 (rv250) graphics. I installed natty from scratch from the alternate disc (on usb) with lvm + encryption. I have "nomodeset" in my /etc/default/grub to allow the system to suspend:

GRUB_CMDLINE_LINUX_DEFAULT="quiet splash nomodeset"

Copying the *.pf2 fonts over to /boot/grub and running update-grub got rid of the "no video mode activated" error, but caused even worse problems: after reboot, I'd get to a blank (purplish) screen, and nothing would happen. In retrospect, I may have been at the text mode encryption passphrase prompt, but that wasn't showing up. After Ctrl+Alt+Del, the system would reset, and this time the full screen graphical grub2 would come up, and I could proceed normally to the encryption passphrase prompt.

I then uncommented the following:

GRUB_TERMINAL=console
GRUB_GFXMODE=640x480

and commented the following:

#GRUB_HIDDEN_TIMEOUT=0
#GRUB_HIDDEN_TIMEOUT_QUIET=true

and ran update-grub, and now I always get a small text mode grub on every boot. Not sure which of the above changes were necessary, but this might help someone (possibly me) in the future.