Comment 1 for bug 94849

Thanks for reporting this bug. ATI has released a newer fglrx with a fix for this issue.

I've packaged the fglrx driver, and put the debs up for testing on Gutsy:

    http://people.ubuntu.com/~bryce/Testing/

I notice in the changelog, that the new fglrx has fixes for this exact
problem. Josh Andler has this bug with fglrx and has confirmed that
with these debs, it goes away. Still, additional testing on Gutsy would
be much appreciated.

These are the packages I installed in my tests: fglrx-control, xorg-
driver-fglrx, fglrx-kernel-source, linux-restricted-modules-common,
linux-restricted-modules-2.6.22

Also turn off Composite if you have it on (fglrx doesn't support it)
I've heard it needs to be turned off by setting
    Option "Composite" "0"
rather than "Disable", but have not confirmed this.

fglrxinfo and glxgears are useful to verify things are working properly.