*** This bug is a duplicate of bug 89853 ***
https://bugs.launchpad.net/bugs/89853
Your trick worked for me!!!
after running sudo dpkg-reconfigure xserver-xorg I selected fdeb device, and
finally I put the native resolution (1280x800) and everything works.
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Xorg does not detect Ati Radeon mobility x1300 during Ubuntu i386 7.04 install
https://bugs.launchpad.net/bugs/107711
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