tested with kernel night build 3.11-rc7, still have the same problem
with internal LCD. ( no issue at all with any kernel for external
connected LCD via vga port)

machine: dell inspiron 1501, onboard video card ATI Xpress 200m (RS460).

workaround:

follow the lightdm_delay script provided by Id2ndR 
(https://bugs.launchpad.net/ubuntu/+source/linux/+bug/1029790/comments/60)
 and added radeontool lightoff and on around kms loading  

                radeontool light off
                modprobe radeon modeset=1
                sleep 2
                radeontool light on

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https://bugs.launchpad.net/bugs/1029790

Title:
  1002:714a Can't boot without nomodeset option-kernel 3.5.X.X/3.6.X.X
  ATI M52 [Mobility Radeon X1300]

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