Could this be a compiz problem, causing the X server to crash? Your card should 
have been blacklisted for compiz though. Can you please try to get some log 
files, like Xorg.0.log? One way would be to boot with "safe graphics mode", 
then switch to a console:
 sudo /etc/init.d/gdm stop    # to stop gdm from restarting
 sudo vi /etc/X11/xorg.conf   # and change to "ati" driver
 startx              # to try starting Xorg, which might die
 cp /var/log/Xorg.0.log ~/Desktop/ati.log
 sudo vi /etc/X11/xorg.conf   # and change back to "vesa" driver
 sudo /etc/init.d/gdm start    # login in again and send the log to us

(I vaguely remember an issue with the gdm init script failing to stop
gdm on the live CD. Maybe you have to just kill it.)

** Summary changed:

- Hardy alpha 4 live CD loops between login and desktop
+ live CD loops between login and desktop on ATI Xpress cards

** Changed in: xorg (Ubuntu)
Sourcepackagename: None => xorg

-- 
live CD loops between login and desktop on ATI Xpress cards
https://bugs.launchpad.net/bugs/188660
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