Ok, I have a dual boot on this machine.
Both partitions have Oneiric running with fglrx driver now installed.

I have not installed Ubuntu updates on the second partition and the environment 
is working better.
I only just updated the linux kernel to 3.0.0-12, confirmed no change, then 
fglrx to 2:8.881-0ubuntu3, again confirmed no change.
Finally upgraded compiz to 1:0.9.6+bzr20110929-0ubuntu1.

Compiz crashes when I try to set the dual monitors up in amdcccle but
the desktop does appear altered after it recovers from that crash.

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https://bugs.launchpad.net/bugs/864505

Title:
  [Oneiric] Cannot setup dual monitor with AMD 5870

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