Comment 37 for bug 1276379

(a fixed version of the comment I posted earlier, one link was wrong)

I bumped into this problem on a friend's computer.

Another summary of how to go back, in Terminal app, to the old version where AMD had not yet dropped support for 2000/3000/4000 Radeons:

If you have 32-bit Ubuntu 12.04, copy-paste the following to Terminal:

wget https://launchpad.net/ubuntu/+source/fglrx-installer/2:8.960-0ubuntu1.1/+build/3702678/+files/fglrx_8.960-0ubuntu1.1_i386.deb
wget https://launchpad.net/ubuntu/+source/fglrx-installer/2:8.960-0ubuntu1.1/+build/3702678/+files/fglrx-amdcccle_8.960-0ubuntu1.1_i386.deb
dpkg -i fglrx*8.960*.deb
sudo apt-mark hold fglrx
sudo apt-mark hold fglrx-amdcccle

If you have 64-bit Ubuntu 12.04, copy-paste the following to Terminal

wget https://launchpad.net/ubuntu/+source/fglrx-installer/2:8.960-0ubuntu1.1/+build/3702677/+files/fglrx_8.960-0ubuntu1.1_amd64.deb
wget https://launchpad.net/ubuntu/+source/fglrx-installer/2:8.960-0ubuntu1.1/+build/3702677/+files/fglrx-amdcccle_8.960-0ubuntu1.1_amd64.deb
dpkg -i fglrx*8.960*.deb
sudo apt-mark hold fglrx
sudo apt-mark hold fglrx-amdcccle

After doing either of the above, depending on your Ubuntu installation being 32-bit or 64-bit, it should be back to the normal after a reboot.

There are some alternatives too - the open source drivers in the 12.04.4 LTS point release or the upcoming 14.04 LTS are mostly really good also for games nowadays for the older Radeons. fglrx should not be installed at all in those cases. But the easiest way is to revert back to the old but known to be functional ones.