The problem still exists. Please let me know which kind of info you need and I 
will try to gather it for you.
Let me start with some hardware specs.
- IBM T42 laptop 
 -- Intel Pentium M 1.7 735 CPU (Dothan), 2MB L2
 -- 768MB PC2700 DDR
 -- 60GB 5600RPM
 -- Combo DVD CDRW station
 -- 15" TFT, SXGA (1400x1050)
 -- Ati Mobility Radeon 9600 64MB DDR
 -- 802.11G WLAN
 -- Gigabit ethernet adapter
 -- 56k6 modem
 -- 2x PCMCIA Type II
 -- 2x USB2.0
 -- S-Video
Then my software specs:
- Latest ubuntu beta for 8.04 with all updates in place.
- Official AMD/ATI linux drivers from the standard repositories

Then I can say that everything does work when working with 1 kernel
version lower. Might it be a compatibility issue between the kernel and
the driver?

-- 
after login there is no desktop showing accept the whole white screen.
https://bugs.launchpad.net/bugs/120710
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