I can confirm the same problem on HP nw8240 (ATI FireGL V5000, 1920x1200) with 
Kubuntu Knot2 Desktop CD.
Usplash works at the beggining (with test image on gray background), but then 
it switches to horizontal white strip pattern (one thin line every 3-4 mm) and 
blinking cursor in upper-left corner. All the IO stops at this point. When I 
press Ctrl-Alt-F3, I get blank screen and IO restarts. After some time it 
switches back to stripes and finally I get the login sound and blank screen 
(due to bug 22985). If I want to switch back to text console (Ctrl-Alt-F1), I 
get white stripe display again and I cannot login in order to workaround bug 
22985.

I have restarted install by only taking out "splash" option from grub
and I do not get white stripes and pause in the startup, but only blank
screen that can be workaround as described in bug 22985.

** Changed in: usplash (Ubuntu)
       Status: Unconfirmed => Confirmed

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Can't Boot with splash boot option.
https://launchpad.net/bugs/58455

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