if it's fixed in hardy, it might be a combination of newer X *and* newer ATI 
driver.
keep in mind that xorg is newer in hardy.

for gutsy, i think the simplest solution is just to use the feisty ATI
driver. it completely stopped the lockups for me. you just install the
feisty ATI driver, *no* other dependency.

just check
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/108527/comments/53
and 
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/108527/comments/102

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X freezes when compiz is enabled on ATI cards
https://bugs.launchpad.net/bugs/108527
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