OK, rename it back (I am not sure if this file is being used anyway), and try 
this command instead:
 sudo -u gdm gconftool-2 --type=bool --set 
/apps/gnome_settings_daemon/xrandr/turn_on_external_monitors_at_startup false
This should hopefully give you a login screen even with the "bad" package 
version installed. If so, you can run this on the console as your own user:
 gconftool-2 --type=bool --set 
/apps/gnome_settings_daemon/xrandr/turn_on_external_monitors_at_startup false
and then be able to log in to Gnome as well.

If the above is correct, it seems like a normally harmless change in
gnome-settings-daemon triggered a bug in the radeon driver.

-- 
[RV350] Desktop corruption – Screen only shows vertical bands
https://bugs.launchpad.net/bugs/643118
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