Fresh install of Ubuntu 7.04 (x86), updated, no other packages installed save the fglrx driver, using the initial user. The only tweak I made was letting fglrx use the "horizontal" mode so that my desktop was 3200x1200 across two monitors. After endless flailing and the process of elimination it seems that the combination of fglrx and one or more transparent panels causes the system to lock while in the middle of loading the panels after log-in. Sometimes it would load them okay and lock at a seemingly random time, even while the PC wasn't being used and the screensaver was on. The hardness of the freeze would vary, but usually the keyboard and mouse were completely unresponsive and the login audio would lock in the sound card's buffer, endlessly replaying. If I set the panels to a solid color (which theme I use doesn't matter) it works fine, but if I set them to be translucent and log out, then back in, it freezes.
Let me know if anyone can reproduce this, as it really really pissed me off until I finally realized what was causing the problem. Thanks all.
Kevin
I've changed the subject and would like to add that I have also reproduced this on a Dell OptiPlex GX 400 with an ATI Radeon All-In-Wonder 9700 Pro using ATI's proprietary driver. I used Envy to install the driver so it's the latest version. The card it initially failed with in my other system is an ATI Radeon X1800 XT, also using the proprietary driver. The Dell however is only using a single display, nothing fancy.