I tried downloading the driver directly from ATI, Installing it and then
enabling hardware drivers fixes the problem for my HD3200. Had to skip
the restart after installing the ATI driver though. The whole thing is a
complete pain but it get the job done.

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package fglrx (not installed) failed to install/upgrade: subprocess new 
pre-installation script returned error exit status 1
https://bugs.launchpad.net/bugs/575395
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