Public bug reported:

I just upgraded from Feisty to Gutsy release candidate, and found the no
graphic acceleration was happening.  My Dell D600 Latitude Laptop is not
supported by the latest fglrx driver and so I must use the open source
ati driver since Feisty.  In Gutsy it seems that Xgl is selected by
default, and when you go to the Screens & Graphics control panel you can
select the ATI driver, but when you do, Xgl is still operational, and it
is not using the graphics processor and the ati (radeon) driver at all.
I found if I put a file in ~/.config/xserver-xgl/disable then my the ati
driver is used.  My glxgears went from 32 to 850 or so.

** Affects: ubuntu
     Importance: Undecided
         Status: New

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Xgl needs to be turned off when ati driver selected.
https://bugs.launchpad.net/bugs/152695
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