I am having the same problem on Kubuntu Hardy (with the latest ATI drivers).
Unfortunately the settings suggested by Dorgendubal did not fix this issue for me, but I have found another (dirty) workaround:
Dont use the "Logout" button on the K-Menu but rather just kill the XServer using Ctrl-Alt-Backspace. If I do that X restarts just fine, and I get back to the login screen.
I am having the same problem on Kubuntu Hardy (with the latest ATI drivers).
Unfortunately the settings suggested by Dorgendubal did not fix this issue for me, but I have found another (dirty) workaround:
Dont use the "Logout" button on the K-Menu but rather just kill the XServer using Ctrl-Alt-Backspace. If I do that X restarts just fine, and I get back to the login screen.