At this point, I am for removing ati-drivers (fglrx) from our Live images and force radeon.modeset=1 by default. This won't break current installations nor new ones. Users will be able to install ati-drivers and switch to them more-or-less easily (I can write a quick howto guide on the wiki, or you can do that!). The problem is simple: it is impossible to make both fglrx and radeon coexist now that KMS is mandatory and given the previously mentioned bug.
Current installations can be fixed by adding "radeon.modeset=1" to cmdline. I am not 100% sure yet, but very close that this is the only viable and reliable solution to the issue. -- Fabio Erculiani
