This is confirmed. Fixed with Options "MonitoryLayout" "TMDS, NONE" (for
example). The ati driver sometimes thinks there's a second monitor where
there is none, then "queries" this emptiness and thinks that better not
to use anything higher than 640x480. There's some information in some
bugs of the freedesktop.org bugzilla, if someone is interested in trying
to fix the problem.
** Changed in: xserver-xorg-video-ati (Ubuntu)
Status: Needs Info => Confirmed
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Resolution in X will not go above 640x480 on Radeon X800
https://launchpad.net/bugs/44873
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