*** This bug is a duplicate of bug 838659 ***
    https://bugs.launchpad.net/bugs/838659

Update. not exactly sure what caused it but the problem was xorg.conf

 seems the old xorg.cofg was renamed to xorg.conf.dist-
upgrade-201110070100

and the new xorg.conf only had in it

Section "Screen"
        Identifier      "Default Screen"
        DefaultDepth    24
EndSection

Section "Module"
        Load    "glx"
EndSection

so I restored the old xorg.conf and everything works.

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Title:
  [Oneiric] Cannot setup dual monitor with AMD 5870

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