Public bug reported:

I attempted to use the restricted ATI drivers (for my Dell Inspiron 6000
laptop with ATI Mobility Radeon X300). With the restricted driver
running all the desktop effects stopped working. If I went in and tried
to change the visual effects to any setting, it said "Not available."

With the restricted ATI driver off, desktop effects work (normal and
extra), but seem to cause system lock-ups at times. The lock-ups do not
seem to be related to any one program or event. With the free ATI driver
I also only have a very limited selection of screen resolutions, but
would rather use this free driver with all desktop effects off for now
to have a stable system.

** Affects: ubuntu
     Importance: Undecided
         Status: New

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ATI drivers cause problems with Mobility Radeon X300
https://bugs.launchpad.net/bugs/147950
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