On the the 2012-09-12 lubuntu desktop image X seems to work for me now.
Though when the shutdown menu is activated, the screens colors go all
wonky.

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You received this bug notification because you are a member of Desktop
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https://bugs.launchpad.net/bugs/1046951

Title:
  No desktop environment or window manager, just X with the mouse

Status in “xserver-xorg-video-ati” package in Ubuntu:
  Confirmed

Bug description:
  The only thing that the graphical display shows is the mouse pointer.
  It moves around just fine, thoug the immediate square area surrounding
  the mouse has bad graphics.  Except for the mouse area, the screen is
  black.

  ProblemType: Bug
  DistroRelease: Ubuntu 12.10
  Package: xorg 1:7.7+1ubuntu3
  ProcVersionSignature: Ubuntu 3.5.0-13.14-powerpc-smp 3.5.3
  Uname: Linux 3.5.0-13-powerpc-smp ppc
  ApportVersion: 2.5.1-0ubuntu4
  Architecture: powerpc
  Date: Thu Sep  6 20:20:31 2012
  InstallationMedia: Lubuntu 12.10 "Quantal Quetzal" - Alpha powerpc (20120904)
  SourcePackage: xorg
  UpgradeStatus: No upgrade log present (probably fresh install)

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