Same problem over here both in clean install and after upgrade from feisty.
Graphics card is Geforce FX5200 using hardy beta. I used the nvidia-glx-new 
driver on feisty all was working perfectly.
Going to try to add Driver "nv" to xorg.conf as mentioned by Shaun Crampton

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[Hardy] NVIDIA cards using vesa driver and low screen resolutions on livecd
https://bugs.launchpad.net/bugs/173418
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