@Gillam: You can compile the ati driver Version 8.28.8. you have to change the 
shell to /bin/bash:
ln -s /bin/bash /bin/sh
The driver doesn't compile with the standart ubuntu dash-shell.

@Collins: The main problem is the package description. which says that the old 
chipsets are supported. 
For newbies there should be a link to the wiki, howto install the old version 
by compiling the driver.

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Older ATI Radeons not supported from fglrx driver above 8.28.8
https://launchpad.net/bugs/83145

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