Comment 18 for bug 464591

I was having this flickering screen on the TTY1 prompt problem.
My fix for a Dell E1750 with an ATI Mobility Radeon X1400 Card:

(ssh into the machine if possible, or boot in recovery mode)
su -
service stop gdm
apt-get remove xorg-driver-fglrx xserver-xorg-video-radeon xserver-xorg-video-ati
apt-get autoremove
apt-get install xserver-xorg-video-radeon xserver-xorg-video-ati libdrm-radeon1
Xorg -configure
cp /root/xorg.conf.new /etc/X11/xorg.conf
init 6

This will blast your current xorg.conf away. Sorry. Back it up if you're sentimental.

The big problem I had, besides the initial graphics floundering, was that when the xserver-xorg-video-radeon package was installed, it didn't install libdrm-radeon1. This caused Xorg -configure to spit out a nasty segfault.