I have the same kind of problem, but only with multihead setup! As in,
with 8.600 driver I can use everything with a cloned desktop.

Specs:
 - AMD Phenom II X4
 - 64-bit Ubuntu intrepid beta (updated < 30min ago)
 - ATI HD 4650 based graphics card

The multihead configuration was created with "aticonfig --initial
--screen-layout=right".

$ fglrxinfo
display: :0.0  screen: 0
OpenGL vendor string: ATI Technologies Inc.
OpenGL renderer string: ATI Radeon HD 4650
OpenGL version string: 2.1.8575


** Attachment added: "Multiheaded X with fglrx crashing down"
   http://launchpadlibrarian.net/25047402/Xorg.0.log.old

-- 
[ATI driver specific] Ubuntu hangs after usplash with gflrx 8.600
https://bugs.launchpad.net/bugs/346028
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