I can reproduce this bug.
My laptop is a Fujitsu Amilo Pi1536, Core Duo T2300, ATI x1400
The X server crashes on starting gdm (signal 11 error).
I have edited the xorg.conf file and the vesa driver was being used. (This 
should be OK, since ATI x1000 series are not supported by the open source ati 
driver).
I suppose this is a xorg or vesa driver related bug.
I consider that it should be classified as critical, as it blocks the average 
user (the target audience of the desktop install cd).

I have found the following workaround (I have been able to successfully
start the livecd in 640x480, and complete the installation). See if this
works for you.

$ sudo dpkg-reconfigure -phigh xserver-xorg

Choose the default options, except when you are asked for the resolutions. Then 
choose only 640x480. (I have found this is the only one that works).
(you can instead edit manually /etc/X11/xorg.conf with nano and delete all the 
other resolutions)
$ sudo killall gdm
$ sudo gdm

After the installation has finished you can install the fglrx through 
"Restricted Drivers Manager". (I think you need to have the internet connection 
active).
Then in a console
$ sudo dpkg-reconfigure xserver-xorg
Make sure you choose the 1280x800 resolution.
CTRL+ALT+BackSpace

And that's all, you should now have your ubuntu feisty working at native
resolution.

-- 
desktop cd fails to start gdm with hp nc6400 (widescreen, ati-based laptop)
https://bugs.launchpad.net/bugs/103945
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