Uploaded to my ppa. If it solves the issue let me know and I'll put it into jaunty.
** Changed in: xserver-xorg-video-ati (Ubuntu)
Status: Triaged => In Progress
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[RV770 HD 4850] ATI Radeon HD 4850 not supported - white screen and system
freeze
https://bugs.launchpad.net/bugs/325394
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