Comment 4 for bug 538377

Hi Daniel, okay I think we should forward this upstream to look at, however there's a couple things I'd just like to doublecheck first.

I see you posted an xorg.conf. Pretty much it looks totally okay, but I think everything that is listed there are now defaults, and in fact should set up properly with no xorg.conf. Could you please try moving aside your xorg.conf and boot with no xorg.conf at all, and see if the issue reproduces?

Second, you mentioned you'd had fglrx installed previously. Sometimes, depending on how it is uninstalled, it can leave some bits on the disk which then screw up the open source driver's 3D. I don't see any evidence this is happening here, but just in case please follow the directions at the following link to purge any remaining fglrx components: https://wiki.ubuntu.com/X/Troubleshooting/FglrxInteferesWithRadeonDriver

Finally, I notice you're running the 2.6.33 kernel. Does the same thing happen when using the stock lucid kernel?