After a lot of messing around I was finally able to fix this problem so I 
thought I'd share my solution. The AlwaysRestartServer patch didn't work for me 
so I tried installing the newest drivers (8.37.6) which I got from ATI's 
website. The drivers installed correctly but when I looked at dmesg it seemed 
like ubuntu kept loading the wrong version at startup. After a lot of searching 
I found the solution here:
https://help.ubuntu.com/community/BinaryDriverHowto/ATI
In order to successfully replace the drivers you have to follow this rather 
complicated procedure which involves installing some extra helper packages, 
hand-tweaking some config files and other linux kernel voodoo. Unless you're a 
supreme linux guru you'll need those instructions.

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log out or switch user results in crash
https://bugs.launchpad.net/bugs/107115
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