@ojordan This looks like the same problem I see with 12.10 on an iMac
G5/2.0 20-Inch (ALS) (Identifiers: Ambient Light Sensor - M9845LL/A -
PowerMac8,2 - A1076 - 2056) with a Radeon 9600.

I am not sure if it's relevant, but using
"video=radeonfb:1680x1050-32@60" does apparently increase the color
depth, but glxinfo reports only software rasterization, and unity/compiz
fails.

** Attachment added: "Xorg.0.log of startup with video=ofonly boot option"
   
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/1058641/+attachment/3412681/+files/Xorg.0.log

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https://bugs.launchpad.net/bugs/1058641

Title:
  "No devices detected" radeon regression

Status in “xserver-xorg-video-ati” package in Ubuntu:
  Confirmed

Bug description:
  Testing the quantal daily/live ISOs I've noticed a regression with the
  radeon driver.  The last ISO I tested was from the 19th of Sept and
  that was fine.  Yesterdays live/desktop ISO (28/9/2012) fails to start
  the Xorg server.  It reports that no devices are detected.  Creating a
  very simple xorg.conf overcomes the problem:

  Section "Device"
  Identifier "Card0"
  Driver "radeon"
  BusID "PCI:0:16:0"
  EndSection

  I'll attach the Xorg.0.log from running with and without the above
  xorg.conf.

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