I resolved this by downloading the new driver from ATI. It was released
only one day before the Lucid release date so I hadn't picked it up. The
version I tried above was 10.3, the new version is 10.4 and ran with no
problems. You can download it from
http://support.amd.com/us/gpudownload/linux/Pages/radeon_linux.aspx?type=2.4.1&product=2.4.1.3.3&lang=English

-- 
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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