Thanks Corvar
As you suggested, I installed the fglrx driver from the repository and ran 
aticonfig -- initial --force-monitor=crt1
The system rebooted fine, but for some reason the kernel module wasnt loading, 
however it didnt go back to low graphics mode.
i then removed the repository packages and loaded the ati 8.476 drivers ( from 
the 8.4 ati driver installer )
On reboot the machine came up on the fglrx driver with 3D enabled.
I am however unable to enable desktop effects.

Half way there methinks

Many thank

-- 
gutsy to hardy - all fglrx drivers fail-> low graphics
https://bugs.launchpad.net/bugs/228573
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