This steps worked for me and what you probabably should do is upgrade you ATI drivers. They have solved a lot of those issues you're facing on.
For smooth installation, it is recommended to uninstall currently availabe Catalyst driver. To do this, use these commands from the terminal:
sudo apt-get remove fglrx*
To install the AMD Catalyst 11.12 Linux driver now on Ubuntu 11.10 (32-bit & 64-bit) or any older version, run this sequence of commands:
wget -O ati-driver-installer-11-12.run http://www2.ati.com/drivers/linux/ati-driver-installer-11-12-x86.x86_64.run
If you have a 64 bit system, then install this before anything
sudo apt-get install ia32-libs
After that you can start installing the new ati driver:
chmod +x ati-driver-installer-11-12.run
Make now an update for the X.org file with this command:
sudo aticonfig --initial -f
Hope this helps.