Public bug reported:

Binary package hint: xserver-xorg-driver-ati

I couldn't ever get to the desktop on the LiveCD with gutsy BETA - gnome would 
try to login, crash, retry, crash, etc.
Finally, I tried a failsafe X session, that worked, so I tried a failsafe gnome 
session, and that worked.  I installed onto the harddrive, then observed the 
same behavior after rebooting off the HD.  I had to choose gnome-failsafe for 
the session type before I could login.

Figuring that it was a problem with the ati driver, I used the
restricted driver manager to install fglrx, and after I rebooted, I was
able to login with the normal full gnome session - no problem.  Just
thought I'd report this, as the behavior on the live CD will definitely
confuse novice users - as they probably won't know to go and choose
failsafe session.

** Affects: xserver-xorg-driver-ati (Ubuntu)
     Importance: Undecided
         Status: New

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full gnome session hangs with ATI driver and gutsy BETA
https://bugs.launchpad.net/bugs/146138
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