I have solved the problem: in the upgrade from gutsy to hardy, for some
reason the package linux-restricted-modules was NOT installed.

So:

sudo apt-get install linux-restricted-modules
sudo /etc/init.d/gdm stop
sudo modprobe -r fglrx
sudo modprobe fglrx
sudo /etc/init.d/gdm/start

Finally, glxinfo reports: Direct rendering: Yes

Just to be sure, my xorg.conf uses the fglrx driver and has also these
sections:

Section "DRI"
        Mode         0666
EndSection

Section "Extensions"
        Option      "Composite" "true"
EndSection


Hope that helps.

-- 
gutsy to hardy - all fglrx drivers fail-> low graphics
https://bugs.launchpad.net/bugs/228573
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