The very latest package from tormod fixed this for me. Take a look at
https://bugs.freedesktop.org/show_bug.cgi?id=14336. Thanks, guys.
** Changed in: xserver-xorg-video-ati (Ubuntu)
Status: Confirmed => In Progress
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Ubuntu 7.10 won't use full capability of my ATI graphics card, only get 800x600
now, 6.06 allowed higher resolutions
https://bugs.launchpad.net/bugs/162136
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