Here's an update:
I managed to resolve this issue (and will cross-post to the forums as well) by referencing this against another bug in another package/forum: http://www.virtualbox.org/ticket/2288
I found that essentially the same X error was being caused by the vboxdrv under Ubuntu 8.10/2.6.27-7 kernel, which seemed odd - since I had Virtual box installed, and dkms reported that the vboxdrv module was assigned against the earlier 2.6.24 kernel.
Disabling vboxdrv ('/etc/init.d/vboxdrv stop' followed by removing the execute flag from the file itself) caused dkms to fail to load the module at boot (which I had been seeing before), but 'dkms status' now says this:
~$ dkms status
vboxdrv, 1.6.2: added
fglrx, 8.543, 2.6.27-7-generic, x86_64: installed
and the fglrx driver works fine.
So it may be (or at least appears to be) an issue with modules loaded through dkms for older kernels not being disabled properly.