I experienced something like this, which was resolved by disabling
compiz (I just did chmod a-x /usr/bin/compiz and rebooted). Can you try
to see if disabling compiz is enough to make it work with the -ati
driver?
Also, anyone who is seeing this issue and has not already done so,
please attach your /var/log/Xorg.0.log when running with -ati enabled,
and the output of `lspci -vvnn`. Also look in your /var/log/gdm.log to
see if there are any error messages there, and if so please also list
them.
** Changed in: xserver-xorg-video-ati (Ubuntu)
Status: New => Incomplete
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Blank screen before login ubuntu 8.10 alpha 6
https://bugs.launchpad.net/bugs/272463
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