Do you have the same problem with 7.10 final? If yes, could you test the
newer driver from https://wiki.ubuntu.com/XorgOnTheEdge?
** Changed in: xserver-xorg-video-ati (Ubuntu)
Sourcepackagename: xorg-server => xserver-xorg-video-ati
Status: New => Incomplete
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gutsy beta - gnome apps misinterpret xrandr
https://bugs.launchpad.net/bugs/151790
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