Thanks for the bug report. The issue is that the restricted(ati binary)
drivers do not support 3d desktops. However it has been said that the
next release most likely within a month from now will support this.
Also although their is some support for supporting this feature in the
free ati driver I believe it will be a long time before this becomes a
priority. On top of that I believe they just blacklisted the x300 in
the last couple of days from supporting 3d desktops out of the box for
exactly these reasons.
Thanks,
~ Mike
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ATI drivers cause problems with Mobility Radeon X300
https://bugs.launchpad.net/bugs/147950
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