Same laptop here. The problem is about the resolution. I've resolved it
changing in /etc/X11/xorg.conf the modes in the display subseccion of
the screen section. Change it from '1680x1050' to '1024x768' and restart
x (ctrl+alt+backspace) and works.

I've tried this workaround in Ubuntu and Kubuntu, from 6.10 to 7.04 herd
5. Installed from live-cd or alternative cd many times this way.

-- 
Feisty Fawn Herd 4 -- display distorted on Acer Travelmate with ATI Mobility 
Radeon X1600
https://launchpad.net/bugs/86085

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