I have a laptop Fujitsu-Siemens Amilo 1536 with ATI Mobility Radeon x1400, and 
I have the same problem using the Beta-live-cd (today is 19th isn't today that 
Feisty Stable have to be released?)
I resolved the problem installing with alternate-cd, then in the console I've 
done:

apt-get update, apt-get upgrade (but it isn't enough; if I stop here I
receive the same error) and at the end I mustrn apt-get install xorg-
driver-fglrx and run sudo aticonfig --initial.

Only after all this steps I can run startx successfully.

-- 
[regression] 7.2 broke vesa: "No matching modes found"
https://bugs.launchpad.net/bugs/89853
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