that's because radeonhd doesn't support kernel modesetting and never
will. You need to add "nomodeset" to the kernel options in grub. The
right thing to do though is to ditch radeonhd for good, -ati has
supported the same devices for some time now, and is the default anyway.
** Changed in: xserver-xorg-video-radeonhd (Ubuntu)
Status: Incomplete => Invalid
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Lucid: Using radeonhd with a RV730XT card gives nothing but a blank screen
https://bugs.launchpad.net/bugs/527922
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