I experience the same kind of problem on Toshiba Satellite M60-161, also with 
ATI X700.
What I have verified so far problem only appears when using fglrx, open xorg 
version 
does not show this behaviour. I use currently Ubuntu 8.04, but saw this problem 
also with
elder version of the system.

I attach requested information.

** Attachment added: "lspci-vvnn.txt"
   http://launchpadlibrarian.net/21603745/lspci-vvnn.txt

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Gnome login screen showed rare after logging out
https://bugs.launchpad.net/bugs/264465
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