I had the same problem with an up to date Ubuntu Jaunty and a ATI Radeon HD 
3870.

I did the same as Aisthesis above and downloaded the 9.4 driver from the
ati.amd.com website and installed that and it's been much better.  I no
longer need to reboot everyday.  (uptime 4 days)

-- 
restricted drivers (ATI) causes Xorg memory leakage
https://bugs.launchpad.net/bugs/353800
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