Until this bug is fixed my workaround is:
sudo cp -p /etc/X11/xorg.conf.failsafe /etc/X11/xorg.conf
NOTE: /etc/X11/xorg.conf did not exist previously
System > Preferences > Monitors indicates 1280x1024 0hz (previously it had many 
settings but this bug existed in all of the previous settings).

-- 
KMS & radeon in Lucid renders X unusable, but only since about April 26
https://bugs.launchpad.net/bugs/573983
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