This is fixed now with the following commit in the xf86-video-ati:
http://gitweb.freedesktop.org/?p=xorg/driver/xf86-video-ati.git;a=commit;h=a0a73208a21546ac120fb9a463261836c9ea7b55



** Changed in: xserver-xorg-driver-ati (Ubuntu)
Sourcepackagename: linux-source-2.6.22 => xserver-xorg-driver-ati

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Suspend-To-Ram (S3) doesn't work on Dell Latitude C640
https://bugs.launchpad.net/bugs/34155
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