That's correct - enabling the restricted driver (aka 'fglrx') now works with 
kernel 2.6.22-14 without the screen going black. 
On enabling Desktop Effects, the screen goes white instantly.

Same old problem with black screen persists when using kernel 2.6.22-16.

-- 
fglrx - gutsy - ati: Black Screen with ATI RV535 [Radeon X1650 Series] 
[1002:71c7]
https://bugs.launchpad.net/bugs/146515
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